Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin were indicted on charges of conspiracy, securities fraud, and wire fraud this week. Prosecutors are focusing on statements they made reassuring investors about the financial condition of their hedge fund even as it collapsed. Now professor of law at New York University points out that a former Bear Stearns CEO, Jimmy Cayne, told investors the bank had no liquidity issues. A few days later the securities firm was on the verge of bankruptcy and had to be rescued by an emergency acquisition and intervention by the Federal Reserve.
"He could be in deep trouble," Harry First tells the New York Sun.
U.S. Sees Crime in the Credit Crisis [New York Sun]
Posted by MF , Jun 20, 2008 9:43AM
Jimmy Cayne can always use the weed defense. All he would get is a stint at rehab and some community service.
Posted by guest , Jun 20, 2008 9:49AM
Leave Jimmy Cayne out of this!!!!
Posted by guest , Jun 20, 2008 9:57AM
Leave Jimmy Cayne alone! I'm serious!
http://www.youtube.com/watch?v=kHmvkRoEowc
Posted by guest , Jun 20, 2008 10:26AM
@9:43 -- yeah, he should just play this in his defense: http://www.youtube.com/watch?v=305vRNoofr8
Posted by guest , Jun 20, 2008 10:40AM
Jimmy Cayne is buying a 8 BR apt in NYC near Washington Square Park.
Posted by guest , Jun 20, 2008 10:57AM
wasn't it schwartz who made the no liquidity issue stmt? On CNBC?
And isn't the consensus that they had no liquidity issues until he made that statement? WTF!?
Next some geniuses will be calling for Schwartz to be arrested for causing bear's liquidity crisis!
Posted by guest , Jun 20, 2008 11:08AM
@ 9:43 -- lol -- I was gonna save Bear Stearns and then I got high...I was gonna raise some more capital and then I got high...
Posted by guest , Jun 20, 2008 11:19AM
How many of the finger pointers have been in a shit storm known as a bank run? You don't have a liquidity issue unless the run is ON, and then it's gone in 48 hrs.
The people excoriating BSC over this are fucking fools.Did any of them go on record saying as a result of market conditions, the repo market would begin to seize up and lenders would pull collateral and refuse to deal with a profitable company because they freaked out, or do they only say that once they can utilize their talents at hindsight bias and construct a lil' narrative fallacy?
Posted by guest , Jun 20, 2008 11:20AM
They've all made these statements, LEH, Citi, ML etc. They all could technically face prosecution on this if the DOJ wanted to delve deep enough. Who know's what kind of email banter is going on behind the scenes between the CEO's and CFO's.
Posted by guest , Jun 20, 2008 11:36AM
QUATTRONE-CIOFFI '08
Posted by guest , Jun 20, 2008 11:43AM
"We dont make money, we print it" Who is responsible for this gem.
@11:19, the run was justified, BSC was a house of cards as far back as mid 06. What did you expect, funds to keep their money in that garbage firm while Cayne and Schwartz are off playing bridge?? No one is going to keep the REPO lines open to a firm they fear is foing to be insolvent, sorry bout that. These guys were their own worst enemies.
Posted by guest , Jun 20, 2008 11:46AM
Don't forget to bring a towel!
Posted by guest , Jun 20, 2008 11:54AM
Go get your shine box
Posted by guest , Jun 20, 2008 11:59AM
I prefer foot massage to shoe shine, can charge more and get to rub those hot wall street feet!
Posted by guest , Jun 20, 2008 12:05PM
I'm so glad I'm banking in North Dakota.
Posted by guest , Jun 20, 2008 12:08PM
What were we saying about the "criminalization of failure"? Hahahahahaha.
Posted by DrederickTatum , Jun 20, 2008 12:15PM
Jimmy Cayne could become one of the DOMINANT bridge forces in the whole Federal Corrections system.
Posted by guest , Jun 20, 2008 12:49PM
@12:15 HAHAHA
Posted by guest , Jun 20, 2008 4:02PM
It was Alan Schwartz who appeared on television and said there were no liquidity issues at Bear Stearns.
The whole concept of the Cioffi/Tannin prosecution is that (a) they knowingly made false statements to induce investments in their funds; (b) investors relied on those statements; and (c)investors lost money.
I don't believe Alan Schwartz knowingly made false statements.
I also don't know whether Alan Schwartz plays bridge.
Posted by guest , Jun 20, 2008 7:08PM
Alan Schwartz doesn't play bridge, the poster is confusing him with Warren Spector.
-Bruce Wayne
Posted by guest , Jun 21, 2008 7:27PM
Well, well, well. Once again, bloggers have sniffed out truth and justice the American way. I recently came across the astute observations of a guest blogger who had connected the dots beteen Gasbagarino, DB, the piece about Dick Bove and Mike Mayo. Apparently, Wall Street executives like Jimmy Cayne, John Thain, John Mack, Dick Fuld, Loyd Blankfein, etc have instructed their respective staffs to have no contact with Gasbagarumor due to his erroneous information, hostile nature and moronic observations. Despit this, the blogger has observed, Mike Mayo appears to be a frequent and anonymous source for the on-airhead editor. Oooops, he/she points out, watch yourself Mike - you're next to be fired!
So, here's the rub: I cut and posted this astute posting a number of times. However, it has been removed by someone with administrative access. Hmmm. One can only conclude that some collusion between Carney, the Gasbag and Mike Mayo to mislead the blogosphere is in play here. Big mistake guys - you don't want to lose your loyal followers! Better that the bad guys be exposed for what they truly are -fucking stupid.