Two former Bear Stearns execs could face charges in subprime probe
June 19, 2008
A federal securities fraud investigation could result in criminal charges as early as today against two former Bear Stearns executives suspected of misleading investors about the risky subprime mortgage market, an official said.
A law enforcement official on Wednesday confirmed reports that Ralph Cioffi and Matthew Tannin, both ex-managers of Bear Stearns Cos. hedge funds that collapsed last year, have been the target of the year-long probe by federal prosecutors in Brooklyn.
The official, who spoke on condition of anonymity because the outcome of the investigation is pending, said an indictment naming Cioffi and Tannin could be announced sometime today.
The United States attorney's office and the FBI declined comment Wednesday, as did a lawyer for Tannin. Cioffi's attorney did not immediately respond to a phone message.
Prominent figures
The former Bear Stearns managers are among the most prominent figures to face criminal charges in the wake of the collapse of the subprime mortgage market.
The fallout has rattled the global economy and the American housing market.
The implosion of the hedge funds also foreshadowed Bear Stearns' own demise, with the Federal Reserve having to intervene earlier this year to bail out the beleaguered bank.
The funds' collapse also fueled the recent credit crisis by showing how much damage the slumping mortgage market could incur on the companies that bought, repackaged and sold the loans...
Author: Gleaner Reporter
Source: Jamaica Gleaner
