Why The Bear Stearns Duo Had To Take The Fall

Posted by John Carney, Jun 26, 2008, 9:10am

We've written a lot about how Ralph Cioffi and Matthew Tannin seem to have had the misfortune of being assigned the role of fall guys for the collapse of Bear Stearns, an event in which they arguably played a minor and peripheral role. But this morning a report from National Public Radio reveals that it is far worse than that. The Feds wanted to arrest some Wall Street guys at the same time they announced the prosecutions of a bunch of mortgage originators. They were intent on arresting the guys, not letting them surrender, and perp-walking them for the photo-op. Even worse, they targeted the Bear guys because the fact that the firm had already collapsed meant the arrests wouldn't roil the market.

Justice isn't blind. It's watching the markets.

How the Bear Stearns Fraud Case Unfolded [NPR]

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Comments

Posted by guest, Jun 26, 2008 9:49AM

FREE RALPH!

Posted by guest, Jun 26, 2008 9:53AM

WAAAAA. Cry me a fucking river.

Posted by BamBam, Jun 26, 2008 10:07AM

I'd like to see Bob Rubin do the perp walk. These low level guys were sacrificed, so the real crooks, like the phony Rubin, could maintain the facade of being above the fray.

Posted by guest, Jun 26, 2008 10:19AM

Guest @9.49am - agreed
Justin Timberlake @ 9.53 - language please

Posted by guest, Jun 26, 2008 10:23AM

wall street "wag the dog"

Posted by guest, Jun 26, 2008 10:35AM

when they put the head ceo and cfo of bear stearns on a pike, and parade it down wall street, then I will be satisfied.

Posted by guest, Jun 26, 2008 10:44AM

@10:35: Easy there, Comrade.

Posted by guest, Jun 26, 2008 10:58AM

Seriously, Cayne, Spector, Schwartz, all of those clowns need to be brought down. Playing bridge while Rome is burning?? WTF? The other clown, the head guido, Molinaro should be brought up on charges too. Gasparino would write something on it, however hes too busy going on tv every two seconds to tell us what a genius dick fuld is. Bunch of clowns. Make the Citi guys look like NASA engineers

Posted by guest, Jun 26, 2008 11:22AM

Citi needs to merge with GS or UBS in order to survive.

Posted by guest, Jun 26, 2008 11:52AM

Hey Carney, aren't you a Republican? Isn't the President of the US a Republican? Isn't the Attorney General of the US a Republican? Isn't the US Attorney in New York a Republican? Guess you can't blame this one on Democrats.

Isn't it always the case that prosecutors will use the evidence that will tend to prove guilt and the defendant has to rebut that evidence? Surprise, surprise, prosecutors bring indictments to send a message!!! Plus, didn't they teach us in law school that a prosecutor can get a ham sandwich indicted?

Where is the outcry for all of the other people in this country who are wrongfully indicted, tried and sometimes convicted because they can't afford high priced legal representation?

Posted by guest, Jun 26, 2008 12:40PM

I bet Jimmy Cayne has been smoking some sweet sweet ganja to alleviate his misery right now.

Do you think that the prison Cioffi and Tannin go to is one of those where they will have to bend over to pick up a bar of soap from the floor?

Posted by guest, Jun 26, 2008 1:40PM

@11:52 AM: agreed 100%
@12:40 PM: I aint no prison expert, but... is there any other kind of prison (beside the soap-picking variety?)

Posted by guest, Jun 26, 2008 2:41PM

@ 11:52, if you can't afford high priced legal representation, then you are a lazy failure, and possibly, and illegal immigrant anyway. Being able to afford high priced legal representation that leads to your own freedom drives a capitalistic system. It gives people incentive to reach to the top. If that's not incentive enough, well then your freedom is like a penny on the floor. Free to pick up, throw against the wall, maybe throw at a friend, maybe flattened by a train to make one of those cool flattened-by-a-train pennies. I don't know, I personally don't touch dirty pennies from the floor.

Citi needs to merge with YHOO, then sell it's stake to MSFT in order to survive.

Posted by Bulging Bracket, Jun 26, 2008 4:07PM

@11:52 - the major problem is that in most of these wall street message prosecutions, there's no actual crime. Criminalizing failure is a really bad idea, never mind these lame half hearted indictments that aren't expected to hold up - see Spitzer, Elliott, entire career.

Prosecutors do have too much power, though the agency problem is a bitch. But thankfully in normal criminal cases there's an actual illegal activity, even if the case is weak or there's a rush to charge the wrong guy. Sometimes it's total BS (Duke LAX, war on drugs seizures of cash, etc) but not often. The entire war on (some) drugs is BS, and if you read the comments here more or paid attention, you'd know that almost the entire DB community wants victimless crimes eliminated (drugs, prostitution, online gambling, idiotic restrictions on alcohol distribution and retailing...).

Free markets in everything, not just on wall street!

Posted by guest, Jun 26, 2008 8:19PM

well if the indictments are not going to stick then the head on a pike trip down wall street is a better idea.

Failure at making money is not talking out of your mouth one way and say every thing is rosy when it is not, I think that is called fraud.

If these wiz kids of wall street had done at least the minumum at looking at these investments instead of playing bridge or whatever nonsense, then there little bear would not be on the auction block and their heads on a pike.

btw, head on a pike is figurative, anyone that kills there own firm based on what I have seen has to be headless. Its a no brainer! Someone needs to look at their credentials or what have you done for me lately. Neither area is up to snuff.

Posted by guest, Jun 30, 2008 10:52AM

Why these guys and not the CFO or CEO of a major i-bank who says "We will not need to raise any more capital this year"??? Not like the feds to kick a firm when it's down, is it? Is this what the unlimited resources of the DofJ afford it? Lame.

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