Indicted Bear Hedge Fund Duo May Face New Charges

Sep 29 2008 | 9:05am ET

Two former Bear Stearns hedge fund managers will learn whether they face additional charges stemming from the collapse of their funds by Dec. 5, prosecutors said Friday.

Ralph Cioffi and Matthew Tannin, who have pleaded not guilty conspiracy and securities fraud, with the former also pleading not guilty to insider trading charges, have been waiting since their June indictments to find out if federal prosecutors would add new counts against them. Cioffi, the former senior portfolio manager of the High Grade Structured Credit Fund and a levered sister fund, already faces up to 40 years in prison if convicted, with Tannin, the funds’ former chief operating officer, facing as much as 20 years. The duo also face civil fraud charges filed by the Securities and Exchange Commission.

“The government continues to consider a superseding indictment of additional charges,” prosecutor Patrick Sinclair told a Brooklyn, N.Y., court conference. Judge Frederic Block told the lawyers, “We would like to see the superseding indictment in place the next time we are here,” a hearing scheduled for Dec. 5.

Prosecutors allege that Cioffi and Tannin misled investors in the two funds about the health of the funds, which collapsed last summer, costing clients more than $1.5 billion. The men are also accused of lying about their own investments in the funds, and of “consistently misrepresenting” the funds’ portfolios.

The defendants, the first to face major criminal charges stemming from the subprime mortgage crisis, say they have done nothing wrong, with their lawyers calling them “an easy target” and “a scapegoat.”


In Depth

Firm Focus: Sustainable Insight Capital Bullish On ESG

Aug 12 2014 | 9:18am ET

Bruce Kahn spent over 15 years as a research scientist/consultant on environmental...

Lifestyle

Viking Manager In Rent Dispute

Aug 11 2014 | 4:14am ET

A hedge fund manager is demanding most of his money back from his former landlord...

Guest Contributor

Majority Of Inflows Go To Brand Name Hedge Funds

Aug 12 2014 | 9:00am ET

Since the market correction of 2008, a vast majority of hedge fund net asset flows...

 

Editor's Note

 

Futures Magazine

PREVIEW July/August 2014 Cover

Inside Futures' 500th Issue

The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.

The Alpha Pages

TAP July/August 2014 Cover

Real talk on alternative investments, business & finance

The Alpha Pages Editor's Note