Bear Stearns Faces Indictment Over Collapsed Hedge Funds

Feb 7 2008 | 1:04pm ET

Bear Stearns may be in serious legal jeopardy over the collapse of two credit hedge funds last year.

Already facing hundreds of millions in claims from aggrieved investors, who lost $1.6 billion in the High-Grade Structured Credit Fund and a more levered sister vehicle, the Wall Street firm is now facing the prospect of a federal indictment.

Federal prosecutors are in talks with high-ranking Bear executives, CNBC’s Charlie Gasparino reports, and have already spoken with Rich Marin, the former head of Bear Stearns Asset Management. According to Gasparino, an indictment of the firm is possible.

The two Bear funds went bankrupt last year after huge losses in subprime mortgage-linked bonds and other credit assets.

In December, the Securities and Exchange Commission announced it was investigating the withdrawal of $2 million from the funds by former manager, Ralph Cioffi, who has since left the firm.

RELATED STORIES

Bear Stearns, Fortress Talked Merger
Bear Hedge Fund Manager Cioffi Out
Hedge Fund Investors File Legal Claims Against Bear Stearns
Bear Wants Manager Of Bad Hedge Funds To Stay
Mass. Sues Bear Over Collapsed Hedge Funds
Collapsed Hedge Fund Investors Seek Bear Ouster
Bear Bitten By Hedge Fund Collapses, Mortgage Crisis


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.