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Tuesday, 24 January 2017
Last updated 10 hours ago
Dec 8 2008 | 1:30am ET
Two former Bear Stearns hedge fund managers will finally stand trial in September, and are unlikely to face additional charges as was previously expected.
The trial of Ralph Cioffi and Matthew Tannin, who managed a pair of hedge funds that invested in subprime mortgages that collapsed last year, helping sink Bear, will begin on Sept. 28, 2009, a judge determined at a pretrial conference on Friday. The two have been charged with conspiracy and securities fraud, with Cioffi, the funds’ senior portfolio manager, also charged with insider trading. Cioffi faces as much as 40 years in prison if convicted, with Tannin looking at 20 years.
But prosecutors, who were mulling additional charges against the pair, declined to bring them by Friday, the deadline set by U.S. District Judge Fredric Block. At Friday’s hearing, Assistant U.S. Attorney Patrick Sinclair told Reuters he “didn’t anticipate” a superseding indictment.
The charges stem from last summer’s collapse of the Bear Stearns High Grade Structured Credit Fund and a more highly-levered sister fund, which cost investors more than $1.5 billion. According to prosecutors, Cioffi and Tannin misled investors about the condition of the funds just as the subprime mortgage crisis began to batter its investments.
Both men have pleaded not guilty and are free on bail.
Cioffi and Tannin also face civil charges filed by the Securities and Exchange Commission.