Bear Stearns chairman James Cayne sold $61.3 million of his shares of the company, according to a filing last night.
JPMorgan agreed earlier this week to increase its original bid for Bear Stearns, which had faced a run on the bank and was close to collapse.
Some investors were hoping JPMorgan Chase would increase its bid again, or that Bear Stearns would find another buyer, because Bear Stearns shares closed yesterday at $11.23 on the New York Stock Exchange, about 20 per cent above the current value of JPMorgan's offer.
If getting a higher price were likely, Mr Cayne would be unlikely to sell his shares, however. The 5.66 million shares Mr Cayne sold would have been worth about $1 billion last year, when Bear's share price peaked at over $170.
Bear's share price fell about 5 per cent in after market trading to $10.68.
JPMorgan Chase's sale is expected to close by mid-June, assuming a majority of shareholders approve it.
Mr Cayne in January stepped down as chief executive after nearly 15 years at the helm of what was once the fifth-largest investment bank in the United States.
Bear Stearns experienced a run on the bank earlier this month as clients withdrew funds and the investment bank lost access to a form of secured financing known as repo funding.