Monday, 20 October 2014
Last updated 53 min ago
Oct 8 2008 | 8:39am ET
Bear Stearns may be no more, but the federal investigation into the collapse of two of its hedge funds is alive and well, and growing.
Federal prosecutors in Brooklyn, N.Y.—who are prosecuting the hedge funds’ former managers for fraud—along with the Federal Bureau of Investigation, have expanded the probe to the activities of banks and lenders to the High-Grade Structured Credit Fund and a more highly-levered sister fund, to determine if those institutions, along with the fund’s investors, were also defrauded. They are also looking at private financial memoranda to see if the firm defrauded wealthy investors.
Last month, federal prosecutors said during a court hearing that they expect to bring additional charges against Ralph Cioffi and Matthew Tannin in December. The two are accused of misleading investors about the condition of the two hedge funds, which had heavy exposure to subprime mortgage-backed securities. Both men faces decades in prison if they are convicted.
One of the potentially defrauded banks in question is Barclays, which has already sued Bear over losses in the hedge funds. In the Securities and Exchange Commission’s wider civil case against Cioffi and Tannin, filed at the same time as their criminal indictments, the agency accuses the two of using “Bank No. 1”—reportedly Barclays—to lever its investments.
Cioffi and Tannin have proclaimed their innocence.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Sep 30 2014 | 9:29am ET
The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…
Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...