Subscribe: RSS Feed | Twitter | Facebook | Email
Home | Contact Us

Posts Tagged ‘Matthew Tannin’

My Thoughts on the Bear Stearns Hedge Fund Case

Posted by Larry Doyle on November 11th, 2009 10:26 AM |

Ralph Cioffi and Matthew Tannin

Ralph Cioffi and Matthew Tannin

Does yesterday’s verdict in the Bear Stearns hedge fund case establish a precedent that precludes likely guilty verdicts in other financial fraud cases? Let’s hope not.

I did not sit in on this trial, so I am not about to weigh in on the verdict. Consensus opinion from those who did sit in on the trial seems to agree that the prosecution presented a very weak case. Additionally, the prosecution was challenged from the standpoint of not being able to admit selected and seemingly incriminating e-mails as evidence.

The not guilty verdict in this specific case does not preclude Cioffi and Tannin from facing other charges. What was the key to this case? The Wall Street Journal sheds light on this case and verdict in writing, U.S. Loses Bear Fraud Case:

The acquittals are a setback for the U.S. attorney’s office in Brooklyn, N.Y., which along with several other offices is investigating Wall Street for possible criminal wrongdoing stemming from the credit crisis, including at Lehman Brothers Holdings Inc. and American International Group Inc. In Tuesday’s case, the question boiled down to this: Were the two men misleading investors, or simply putting a positive spin on sagging returns? (more…)

Bear Stearns Hedge Fund Managers ‘Facing the Music’

Posted by Larry Doyle on October 12th, 2009 12:29 PM |

Is it possible for an industry to accrue trillions in losses and nary an individual forced to truly ‘face the music?’ That reality, perhaps more than any other, is the greatest indictment of the incestuous relationship between Wall Street and its regulatory oversight in the form of the SEC and FINRA.

The music is about to start playing as Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin enter court this week for the start of their trial in which they are accused of misrepresenting the health of their two hedge funds at Bear Stearns.

This trial will attract a tremendous amount of attention. Why? The very fact that it is truly the first legitimate legal proceeding linked to the meltdown of our financial crisis. The trial will highlight incriminating statements and e-mails written by both Cioffi and Tannin. Additionally, we should expect the prosecution to present material which highlights the fact that Cioffi and Tannin seemed to intentionally misrepresent the very nature of their investment holdings.

The Wall Street Journal provides further color on this case in writing, A Case Pitting Spin Against Fraud:

A criminal trial involving two former Bear Stearns executives could help answer a key question stemming from the financial crisis: How far can Wall Street firms go to put a positive spin on bad news?

Ralph Cioffi, a former money manager at Bear Stearns, is escorted by officials to a waiting vehicle in Manhattan on June 19, 2008.

(Ralph Cioffi, a former money manager at Bear Stearns, is escorted by officials to a waiting vehicle in Manhattan on June 19, 2008.)

The two executives, Ralph Cioffi and Matthew Tannin, will fight securities-fraud charges in a widely anticipated trial beginning on Tuesday in a Brooklyn, N.Y., federal court. The money managers unsuccessfully scrambled to keep two mortgage-heavy Bear Stearns hedge funds afloat in 2007 amid sinking mortgage-market prices, the first of several blows that eventually felled Bear Stearns and marked the start of the credit crisis. J.P. Morgan Chase & Co. bought the firm in a March 2008 fire sale.

Prosecutors accused Messrs. Cioffi and Tannin of misleading investors about the health of the two funds, testing the degree to which Wall Street should disclose bad news to investors. (more…)

Lessons from Bear Stearns

Posted by Larry Doyle on March 16th, 2009 10:37 AM |

It was one year ago that the Federal Reserve and Treasury delivered Bear Stearns into the hands of JP Morgan for $2 a share. Bear Stearns stock had traded above $170 a share in 2006. With the passage of time, what are some of the lessons learned and what questions remain unanswered.

1. Although Bear Stearns employees and shareholders may not qualify a price of $2 a share (revised to $10 a few weeks later) as being saved, would the financial system have been better off letting Bear totally fail? Why? If Bear had failed, many people do not believe we would have had the breakdowns in our financial systems that occurred because of Lehman’s failure.

2. Did Dick Fuld, CEO of Lehman, assume that the Fed and Treasury would save Lehman much as they did Bear? Was he less aggressive in pursuing increased capital injections during the Summer 2008 as a result? Many people believe this to be the case. (more…)






Recent Posts


ECONOMIC ALL-STARS


Archives