Monday, 27 April 2015
Last updated 2 hours ago
Feb 10 2010 | 12:58pm ET
An investor in a collapsed Bear Stearns hedge fund has won its arbitration case, despite the fact that the fund’s managers were acquitted of fraud charges in November.
Racetrac Petroleum, an Atlanta-based chain of gas stations, was award $3.4 million by the Financial Industry Regulatory Authority panel. The arbitration award, which was handed down on Dec. 23, accounts for 70% of Racetrac’s investment in the Bear fund, which collapsed in 2007, costing investors $1.6 billion.
The FINRA panel did not explain its reasoning for siding with Racetrac. It held 32 hearings last year on the matter, including six that occurred after the fund’s managers, Ralph Cioffi and Matthew Tannin, were acquitted.
That acquittal led many to believe that JPMorgan Chase, which acquired Bear Stearns in 2008, would escape any liability stemming from the funds’ failures, among the first of the credit crisis in the summer of 2007. When the JPMorgan bought Bear, it set aside $6 billion to cover any Bear litigation liabilities.
JPMorgan is responsible for paying the arbitrage award.
Racetrac’s was one of the few lawsuits and arbitration proceedings that went ahead following the acquittal of Cioffi and Tannin. Federal prosecutors had sought to stay the arbitration, but a federal judge rejected that bid.
Cioffi and Tannin had been accused of lying to investors about the health of the two highly-levered mortgage hedge funds they managed. The Securities and Exchange Commission is still pursuing its civil case against the two men.
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…