Ex-Bear Stearns Hedge Fund Managers, SEC Strike Deal

Feb 10 2012 | 2:46am ET

Two former Bear Stearns hedge fund managers acquitted in 2009 of charges they misled investors have settled with the Securities and Exchange Commission over similar allegations.

The deal between the SEC and Ralph Cioffi and Matthew Tannin is likely to be announced on Monday, the day their trial on civil fraud charges was to begin. It is unclear whether the two men will admit to any wrongdoing, nor what sort of penalties, if any, they will face.

The SEC sued Cioffi and Tannin in 2008, at the same time as their criminal indictment. The two men were accused of lying to 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, which collapsed in 2007. One of the first casualties of the credit crisis, the funds' demise cost investors some $1.6 billion and contributed to the eventual collapse of Bear itself.

Despite bluster on both sides, the SEC, Cioffi and Tannin had a good deal to lose at trial. The former, which rarely pursues civil cases after a criminal acquittal, could suffer a major embarrassment amidst a major winning streak in insider-trading cases, and the latter would have to contend with a lower burden of proof in the civil case.


In Depth

'Smart Beta' Funds In Regulators' Sights, Hedgies May Be Next

Mar 26 2015 | 11:11am ET

Funds that mimic strategies used by active managers for a fraction of the cost could...

Lifestyle

Study: Both Marriage and Divorce Lead to Negative Hedge Fund Performance

Mar 25 2015 | 6:51pm ET

Trouble at home leads to trouble in the market for fund managers, according to researchers...

Guest Contributor

The Life Settlement: Yield For The Investor And Cash For The Consumer

Mar 31 2015 | 6:48am ET

Investors are languishing in a yield-starved, low-interest rate environment, looking...

 

Sponsored Content

    Mar 9 2015 | 6:35am ET

    Kelly RodriquesKelly RodriquesAs more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…

Editor's Note