
Bear bankers face charges over hedge fund losses
Daily news headlines
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.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
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. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Europe’s lenders sail into uncharted waters of the banking book
Regulators are pushing banks to map their credit spread risk. Here be dragons?
SEC may lack legal clout to impose new dealer rule – Citadel
Adoption of quantitative dealer definition may require congressional changes to US Securities Exchange Act
US Basel endgame hits clearing with op risk capital charges
Dealers also fret about unlevel playing field compared with requirements in the EU
CFTC’s clearing house recovery rule splits industry
Some fear CCPs will fast-track recovery, others say any rule book will be ignored in emergency
EU banks ‘will play for time’ in stand-off over India’s CCPs
Lawyers say banks are unlikely to set up subsidiaries and will instead pin hopes on revised Emir fix
ECB mulls intervention on uneven banking book reporting
Inconsistency among EU banks on whether deposits and loans are in scope for credit spread risk
Iosco warns of leveraged loan ‘vulnerabilities’
As recovery rates plummet, report calls for clearer covenants and more transparency on addbacks
Narrow path to compromise on EU’s post-Brexit clearing rules
Lawmakers unlikely to support industry demand to delete Emir active accounts proposal altogether