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

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

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

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

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.