Ex-Bear Hedge Fund Managers Seek SEC Dismissal

Dec 22 2011 | 2:22am ET

The two former Bear Stearns hedge fund managers acquitted of criminal fraud charges two years ago have asked a federal judge to junk some of the Securities and Exchange Commission case against them.

Ralph Cioffi and Matthew Tannin in October sought the dismissal of allegations of scheme liability, arguing that they can't be sued over statements they didn't make. The motion, as well as an opposition made by the SEC in November, was made public yesterday.

The civil trial is scheduled to begin on Feb. 13 in Brooklyn, N.Y.

"Despite the complete acquittal of Mr. Cioffi and Mr. Tannin, the SEC has persisted in pursuing this action based on the same underlying facts," lawyers for the former hedge fund managers wrote.

Cioffi and Tannin are accused of misleading investors about the financial health of their two hedge funds, the Bear Stearns High-Grade Structured Credit Fund and a more highly-levered sister fund. Their collapse more than four years ago cost investors some $1.6 billion and contributed to the eventual collapse of Bear itself.

But the two men were acquitted by a jury of criminal charges of conspiracy and fraud in 2009.

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