The chief executive of Bear Stearns is set to waive his full-year bonus as the US investment bank prepares to unveil its first quarterly loss in its 84-year history.

According to The Wall Street Journal, James Cayne, the chief executive of the bank, will forgo his bonus in an acknowledgement of the bank's performance amid the American sub-prime mortgage crisis.

He has decided not to draw on the bonus pool, despite Bear Stearns meeting the necessary target on return on equity under its compensation scheme.

Bear Stearns will report its fourth-quarter and full-year results tomorrow, following Morgan Stanley, which released its figures today.

Morgan Stanley is reported a quarterly loss because of $3.61 billion due to $9.4 billion sub-prime writedowns.

Last month, Zoe Cruz, the co-president in charge of Morgan Stanley's investment banking arm, left after it announced an expected $3.7 billion (£1.8 billion) writedown.

Goldman Sachs posted record profits for the year yesterday but told investors that it was cautious about the deteriorating economy.

Bear Stearns has been particularly impacted by the US sub-prime crisis.

This year two of its hedge funds collapsed after mortgage-related losses, costing investors $1.6 billion.

It has emerged that a Bear Stearns hedge fund manager is reported to be under investigation by the US Securities and Exchange Commission (SEC).

The SEC is investigating whether Ralph Cioffi removed about £2 million of his own money from one of the two hedge funds in April, the Journal reported.

The funds collapsed in July. Mr Cioffi, 51, left the company last week.

He has not been accused of any wrongdoing by the SEC or by the US Attorney.

Analysts are predicting that Bear Stearns will make a writedown of $1.2 billion to lead to a loss for the fourth quarter of about $260 million.

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