Ex-Bear Stearns fund managers charged with fraud

Source: Exec Digital USA

Date :19/06/2008 06:00:35

Ralph Cioffi and Matthew Tannin, former hedge fund managers at Bear Stearns Cos. have been charged with wire and securities fraud following a federal criminal probe in the collapse of hedge funds they oversaw.

Cioffi, 52, and Tannin, 46, are the first Wall Street executives to face criminal charges related to the US sub-prime mortgage crisis. The men were taken into custody on Thursday morning, June 19, over their roles in the US$1.4 billion collapse of funds linked to subprime lending.

The funds bet on the high-risk sub-prime mortgage market in the US before it collapsed last year.

The collapse of the funds spurred questions about oversight and risk management operations at the investment bank, one of the most high-profile victims of the credit crunch.

It also preceded Bear Stearns' own demise earlier this year, which was sold in March to JPMorgan Chase & Co in an emergency takeover deal brokered by the U.S. Federal Reserve.