Matthew Tannin and Ralph Cioffi are denying allegations they knew two hedge funds they were operating were close to collapse but did not tell investors.
When the hedge funds, which bet on the sub-prime mortgage market, collapsed in June 2007, investors lost $1.4 billion.
Less than a year after the funds collapsed, so did Bear Stearns itself, becoming one of the highest-profile casualties of the financial crisis.
Much of the evidence against the pair is expected to center on emails sent between the two men from November 2006 up to June 2007.
Prosecutors claim Mr Tannin and Mr Cioffi continued to encourage clients to invest in the hedge funds, despite both being aware of the coming financial storm.
In an email from March 2007 that was cited in the indictment, Mr Cioffi told Mr Tannin: "The worry for me is that sub-prime losses will be far worse than anything people have modelled."
A few days later, Mr Cioffi emailed a colleague to say that while Mr Tannin could not decide whether the market was heading towards meltdown or merely becoming a fantastic buying opportunity, he believed meltdown was the more likely option.
Jury selection for the trial at the Federal District Court in Brooklyn started today (October 13th 2009) and proceedings are expected to last for around five or six weeks.
Last week, JPMorgan Chase, which bought out Bear Stearns, paid $55 million on behalf of both investment banks in order to settle allegations they were involved in a Ponzi scheme at American Business Financial Services (ABFS), a now-collapsed mortgage lender.
Credit Suisse and Morgan Stanley also paid out an additional $45 million after it was claimed the four Wall Street firms falsely created the impression that ABFS was still financially viable, despite it becoming insolvent in 2000.
All allegations of wrongdoing were denied by the companies.
By Tony Aynsley