Saturday, 22 October 2016
Last updated 22 hours ago
Jun 19 2012 | 12:34pm ET
A federal judge has—reluctantly—approved the settlement struck between two former Bear Stearns hedge fund managers and the Securities and Exchange Commission.
U.S. District Judge Frederic Block in Brooklyn, N.Y., who criticized the $1 million accord as "chump change" when it was struck in February, said that he was "constrained to accept the settlement." But Block, who presided over the 2009 trial that saw Ralph Cioffi and Matthew Tannin acquitted of criminal fraud charges, urged "Congress to consider whether more should be done by the government to come to the aid of victims of Wall Street predators."
Cioffi and Tannin ran two Bear hedge funds that collapsed in 2007, costing investors some $1.6 billion and helping contribute to the bank's eventual collapse. A year later, the two men were indicted on criminal charges that they misled investors in the Bear Stearns High-Grade Structured Credit Fund and a more highly-levered sister fund, among the first casualties of the credit crisis.
Under the SEC accord, Cioffi will pay $800,000 and Tannin $250,000. Both will also be temporarily barred from the securities industry, Cioffi for three years and Tannin for two, although neither will admit any wrongdoing.