Former Bear Stearns Employees Accused of Misleading Investors

New York, NY —

The trial of two former Bear Stearns hedge fund managers got underway in a Brooklyn federal courthouse yesterday. The U.S. government says Ralph Cioffi and Matt Tannin misled investors. When their hedge funds failed, investors lost $1.6 billion. WNYC’s Lisa Chow reports:

REPORTER: Assistant U.S. Attorney Patrick Sinclair argued that Cioffi and Tannin lied to investors over and over again about two critical elements, their personal investments in the funds and how much money other investors were taking out of the funds. Why? Because, the government, says the two Bear Stearns employees wanted to save their multimillion dollar bonuses. Cioffi’s lawyers argued that the hedge fund manager didn’t work in isolation, that many members of his team and company discussed options for the funds, believed in the health of the funds, and that hindsight is 20-20. Tannin’s lawyers make their opening statement today. For WNYC, I’m Lisa Chow.