Email May Toast Arrested Bear Fund Managers

Pair faces charges of misleading investors in $1.6B collapse
By Jim O'Neill,  Newser User
Posted Jun 19, 2008 10:16 AM CDT
In this March 17, 2008 file photo, an employee enters the lobby of JP Morgan Chase in New York.    (AP Photo/Mark Lennihan, file)
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(Newser) – A pair of former Bear Stearns hedge-fund managers arrested today on federal fraud charges could be done in by an email in which one described their market position as "toast"—days before telling investors it was "quite comfortable." Matthew Tannin and Ralph Cioffi will be indicted later today in a collapse that cost investors $1.6 billion, the Wall Street Journal reports.

Tannin's lawyer proclaimed his innocence, saying, "He is being made a scapegoat for a widespread market crisis." The crucial email, sent in April 2007, was an early warning sign of the financial meltdown that hastened Bear Stearns' demise and swamped world markets since last summer. Financial firms have been forced to write down some $400 billion thus far.