Ex-Bear Stearns employees cleared
Hedge fund managed by duo lost $1.6b of investors' money
New York: Two former Bear Stearns hedge fund managers have been cleared of fraud, a decision that could make government prosecutors less likely to bring criminal charges against Wall Street executives for their role in the financial crisis.
The case — the first major prosecution arising from the meltdown of major US financial institutions — was seen as a litmus test of whether a jury, presented with evidence from e-mails between money managers and conference calls with investors, would convict individuals for corporate collapses.
Ralph Cioffi, 53, and Matthew Tannin, 48, were acquitted of all charges on the second day of deliberations by a jury in US District Court in Brooklyn, New York. Cioffi and Tannin left the courthouse with their smiling wives and relatives, some of them crying tears of relief.
Cioffi and Tannin managed two funds, crammed with subprime mortgage-backed securities, that lost institutional and individual investors a total of $1.6 billion (Dh5.87 billion) when the funds collapsed in mid-2007.
The jury on Tuesday acquitted both men of conspiracy, securities fraud and wire fraud — charges brought in a June 2008 indictment. Cioffi was acquitted of an additional charge of insider trading.
"There wasn't enough evidence ... The e-mails went both ways," jury forewoman Jenny McCaughey told reporters after the verdict.
"They say one thing one time, another thing another time. We just didn't have enough to convict them."
