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December 2, 2008 11:33:04 AM CST

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Feds Investigate Bear Stearns Fund Manager

Posted Dec 19, 07 12:00 PM CST in Business 

(Newser) – The manager of hedge funds that lost $1.6 billion when they went bankrupt in July has left Bear Stearns, and federal investigators are looking into whether he withdrew his own money before the collapse. Ralph Cioffi moved $2 million in March—before the funds tanked in the subprime collapse—to another Bear offering, Bloomberg reports; the feds are investigating.

One of Cioffi's funds earned a 46.8% return from October 2003 to March 2007, Bloomberg reports. Bear Stearns has seen its stock price decline 43% this year as hedge funds linked to debts incurred in subprime mortgages went down the drain. Regulatory reviews launched by the US Attorney in Brooklyn and the Securities and Exchange Commission appear to have snagged Cioffi. 

Source Bloomberg

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The logo for Bear Stearns is shown at its corporate headquarters in New York, in this July 18, 2007 file photo. Bear Stearns Cos., the nation's fifth-largest investment bank, on Wednesday, Nov. 28, 2007...   (Associated Press)
People enter and exit the Bear Stearns corporate headquarters in New York in this July 18, 2007 file photo.   (Associated Press)
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