Bear hedge funds trial set for September
8 December 2008
The former managers of a pair of hedge funds whose collapse cost investors $1.5 billion and helped to bring down the investment bank Bear Stearns will go on trial in September facing charges of conspiracy and securities fraud, according to reports.
Ralph Cioffi and Matthew Tannin, who deny the charges against them, will appear in court on September 28th, 2009, FINalternatives stated.
They are charged with misleading clients about the condition of the funds as the collapsing subprime mortgage market began to ravage their investments.
Prosecutors also accuse Mr Cioffi, the funds' senior portfolio manager, of insider trading, the site said.
If convicted, he could face up to 40 years in prison. Mr Tannin faces a possible sentence of 20 years if found guilty.
Both men face additional civil charges from market regulator the Securities and Exchange Commission.
The defendants have pleaded not guilty and are currently free on bail.
Bear Stearns was the fifth-largest investment bank in America until crushing losses linked to asset-backed securities and subprime mortgages forced its emergency sale to JP Morgan in March of this year.