Federal prosecutors are investing whether Ralph Cioffi and Matthew Tannin misled not only investors but also their lenders and counterparties.
BusinessWeek reports that Ben Campbell's office, the Brooklyn-based Eastern District, is considering further charges against the two former Bear Stearns hedge fund managers, who currently face both criminal and civil charges.
The SEC has already charged Cioffi and Tannin with making misleading statements to "certain institutional counterparties" who remain unnamed. At least one of them is Barclays, which claims Cioffi lied about the fund's performance in a "series of misrepresentations" in a suit filed in December.
Among the alleged dupes are also Bank of America, Dresdner Bank, and Merrill. The charges against Cioffi and Tannin already include lying to a lender, reported to be Dresdner Bank, about the amount of withdrawals from the two funds. Prosecutors are talking with Merrill, according to BusinessWeek's sources, and they are considering criminal charges to accompany the SEC's civil complaint about a $4 billion pool of CDOs that Bank of America guaranteed and market.
The SEC already alleges that Cioffi misled investors about the deal with BoA, which aimed to allow the purchase of CMOs from the two hedge funds. Prosecutors are apparently making a case that BoA itself was misled. In Business Week's read of events, the newer and broader criminal indictment "would prove that even Wall Street sophisticates can get fooled."
Did Bear Stearns Fool the Street, Too? [Business Week]
--Senior legal affairs correspondent Andrew
Posted by guest , Jun 26, 2008 9:01AM
"I pardon you. Ha ha ha ha"
Posted by guest , Jun 26, 2008 9:15AM
How come these guys are taking all the heat and there is no mention of more senior Bear Stearns execs like the CIO and CEO, Rich Marin, of BSAM who had to know and likely even signed off on most of what was going on at their star hedge fund. BS Co-President Warren Spector had ultimate responsibility for the hedge fund business and he so far has benefited from the hedge fund blow ups to the tune of tens of millions of dollars since he was forced out and liquidated all his BS stock before it imploded.
Posted by guest , Jun 26, 2008 9:17AM
Saying you are the head trader at BSC is like saying you are the best janitor in your school district. Im sure they will all blend in with the elitist crowd at JPM just fine...
Posted by guest , Jun 26, 2008 9:23AM
Mayo, white gold in a jar.Gary Tugs
Posted by guest , Jun 26, 2008 9:33AM
if caveat emptor doesn't apply on Wall Street, it applies nowhere.
every one of you would-be hotshots and bsd's ought to be ready to be responsible for your fiduciary idiocy. It is not the SEC's job to make sure you don't get shafted.
having the federal prosecutor du jur as your best buddy is a Faustian bargain.
Posted by Joseph di Jersey City , Jun 26, 2008 9:48AM
I think the first phrase of the first sentence could use some proofing. Then again, maybe not.
Posted by bank_teller , Jun 26, 2008 9:50AM
is this post in english?
Posted by Anal_yst , Jun 26, 2008 9:57AM
WTF IS UP WITH THIS MAYO SHIT?
It just doesn't make any sense basil!
Posted by guest , Jun 26, 2008 9:58AM
Yeah seriously Carney, you either need to smarten up or hire an editor, this is getting embarrassing. better yet, have Beth do the writing, you suck balls.....
Posted by guest , Jun 26, 2008 10:24AM
does this all have something to do with that gay kiss heinz deli mayo ad?