Subprime meltdown leads to arrest of Bear Stearns managers
This morning the cops came knocking for two former Bear Stearns managers.
Matthew Tannin and Ralph Cioffi were taken into custody as the first executives to face criminal charges in the wake of the sub-prime market meltdown.
Tannin and Cioffi face many accusations surrounding the collapse of the Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund. Those allegations include lying to investors and counterparties about the fund’s financial condition.
As the value of the fund’s assets went south, the two are accused of lying about those values and their returns. In public, Mr. Cioffi (allegedly) touted the fund’s performance and promise, while privately withdrawing $2 million of his own money out of the fund.
The fund held assets worth over $20 billion before its rapid descent and ultimate demise in June, 2007.
No doubt activities like this led to the collapse of Bear Stearns, how many will lead to real consequences for the responsible parties?
Tags: bear stearns, collapes, hedge funds, subprimeRelated Stories
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4 opinions for Subprime meltdown leads to arrest of Bear Stearns managers
moneypenny
Jun 19, 2008 at 4:17 pm
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Robert Bassett
Jun 20, 2008 at 2:56 pm
To some degree I feel that Tannin and Cioffi are victims of circumstance. The market has been plauged by the subprime crisis over the past year and finally the “sh*t hit the fan,” so to speak and now the people want blood. Those calling for Cioffi and Tannin’s heads are the one’s reading the WSJ and knew about the credit situation, filling everyone with uncertainty.
While it is obvious that some unethical decisions are made, these two men were not the only men taking part in shady deals because of the market sitaution. Unfortunately for these men, they could be easily linked to some sort of wrongdoing and turned into scapegoats. Maybe they deserve to be thrown out of the business, not spend the next 20 yrs in prison.
jim ledsome
Jun 23, 2008 at 12:31 pm
I fully agree that these two are going to be thrown under the bus and it will look as if the problem has been resolved. You can’t ever truly know who is”dirty” in business and how involved everyone is in the scandal so you cannot put two managers in jail. Fine them, black ball them in the financial industry but they are not solely responsible.
Vince Piovoso
Jun 24, 2008 at 6:41 pm
I’m going to have to agree with what Jim said… The trouble is with all the corruption in the world today… there are to many criminals to convict. Whats worse is that people have come to accept a few scape goats as justification for the wrong doings of many others. Unfortunately thats Corporate America for you.
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