Bear Hedge Fund Manager Cioffi Out

Dec 19 2007 | 10:42am ET

Two weeks ago, Bear Stearns was battling to keep embattled former hedge fund manager Ralph Cioffi in the fold. But last week, the two parties unceremoniously parted ways, as federal investigators looking into the collapse of two hedge funds Cioffi ran for the firm have turned their eye to the fund manager himself.

Cioffi was replaced as manager of the Bear Stearns High Grade Structured Credit and High Grade Structured Credit Enhanced Leverage funds in June, as the two funds collapsed amid this summer’s subprime mortgage troubles. But he had remained on as an adviser to Bear, which earlier this month was trying to persuade Cioffi—who was reportedly planning to launch a hedge fund of his own—to stay at the firm.

He left Bear last week, Bloomberg News reports, because his advisory role in unwinding his two former funds, in which investors lost $1.6 billion, was complete.

Word of his departure comes on the heals of a report that the U.S. Attorney’s Office in Brooklyn, N.Y., and the Securities Exchange Commission are probing Cioffi’s withdrawal of $2 million of his own money from one of the funds in March, just weeks before the two funds ran into trouble. Cioffi moved the money—which represented about one-third of his investment—to another internal fund he had set up.


In Depth

GSAM’s Papagiannis on Liquid Alternatives

May 25 2016 | 5:07pm ET

The popularity of liquid alternatives strategies has blossomed in recent years,...

Lifestyle

From Modern Trader: Stephen Curry is a Black Swan

May 18 2016 | 7:43pm ET

What do the rise of the Internet, the sinking of the Titanic, 9/11, and Stephen...

Guest Contributor

LendingClub and the Question of Internal Hedge Funds

May 19 2016 | 8:42pm ET

Peer-to-peer lending platform LendingClub Corp. has been in the news since the firm...