Bear bankers face charges over hedge fund losses
Two ex-Bear Stearns asset managers are in hot water over failed hedge funds
NEW YORK – Two former Bear Stearns bankers could face criminal charges over the collapse of two hedge funds that cost the failed bank $6 billion (£3 billion) in July 2007.
Ralf Cioffi and Matthew Tannin could be accused of misleading investors before the two funds folded due to US subprime mortgage debts. The two men could be the first high-profile bankers to stand trial in relation to the subprime crisis.
Investigators from the Department of Justice (DoJ) are reportedly interviewing key witnesses and gathering information related to the case. After the evidence is gathered, the US Attorney for New York’s eastern district, Benton Campbell, will assess if securities laws have been broken and whether to charge the men.
Tannin ran the bank’s asset management while Cioffi was responsible for the funds in question – the High Grade Strategy and Enhanced High Grade fund. After injecting $1.6 billion of capital into the funds in June 2007, the bank abandoned hope for their revival.
Both men have reportedly told friends that they had not realised the true state of the investments within the funds, but were instead coping with the general downturn in debt markets. Cioffi moved $2 million of his own money from one of the funds in March 2007.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Imminent US shake-up of LCR slated to include discount window
Adding Fed liquidity facility to bank regulation may help overcome stigma, raise lending capacity
French regulator wants permanent changes to EU’s output floor
Push for capital relief faces resistance from supervisors in Finland and the Netherlands
Council plans take Aquis, BME out of Esma oversight
German push to exempt Deutsche Börse catches three others, according to sources
Why watering down resolution plans is a bad idea
Bank failures are inevitable; banking crises are not
BIS’s Hernández de Cos on AI, non-bank risk and tokenisation
General manager talks about how the BIS is navigating a complex global environment
‘European SEC’ no silver bullet for growth
EU policymakers hope a single, centralised supervisor will help rev up Europe’s economy but critics are mustering
Permanent FRTB reforms seen as vital for IMA adoption
Temporary relief granted in June has done little to encourage internal model use in Europe
How to ensure the next Credit Suisse or SVB fails ‘well’
Regulators are planning changes to resolution rules after criticism that living wills were ignored in previous bank collapses