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Jury Clears Fund Managers in Bellwether Case

Bear Sterns execs accused of fraud go free

By the Associated Press

Posted Nov 10, 2009 5:29 PM CST

(AP) – Two Bear Stearns executives who ran hedge funds that collapsed after betting heavily on the shaky subprime mortgage market were acquitted today of lying to investors—a defeat in the government's bid to punish fraud exposed by the financial crisis. The closely watched case was the first one against Wall Street executives related to the meltdown and doesn't bode well for future prosecutions.

The jury in federal court in Brooklyn deliberated about eight hours over two days before finding Ralph Cioffi and Matthew Tannin not guilty of conspiracy and other charges in an alleged scheme that cost 300 investors about $1.6 billion. At one point in 2007, Cioffi pulled $2 million of his own cash out of the tanking subprime market, but the pair continued to encourage investors to stay in, prosecutors say.

Former Bear Stearns hedge fund manager Ralph Cioffi.
Former Bear Stearns hedge fund manager Ralph Cioffi.   (AP Photo/ Louis Lanzano, file)
Former Bear Stearns hedge fund manager Matthew Tannin exits Brooklyn federal court Tuesday.
Former Bear Stearns hedge fund manager Matthew Tannin exits Brooklyn federal court Tuesday.   (AP Photo/ Louis Lanzano)
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COMMENTS
Showing 2 of 2 comments
RobN
Nov 11, 2009 12:33 PM CST
If you couldn't convict a couple of hedge fund managers in the current F*** The Banker environment, then you really had nothing.
Count-Spatula
Nov 10, 2009 11:31 AM CST
Terrific... Noone with money is guilty of anything. Thanks for collapsing our economy though, assholes.

Copyright 2012 Newser, LLC. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.

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