Blogging the Bear Stearns Trial: Defense Calls "the Boss of the Boss"

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He's the highest-ranking former Bear Stearns executive to testify in this trial so far: Rich Marin, former chairman and CEO of Bear Stearns Asset Management.

Marin supervised Ralph Cioffi, 53, and Matthew Tannin, 48, who are accused of lying to investors about the health of their hedge funds, which collapsed in the summer of 2007. If convicted, the two men could face up to 20 years in prison.

It's not clear who Marin's testimony helped more: the government or the defendants.

WHAT HELPED THE DEFENSE:

Marin testified that he met with Cioffi and Tannin, and others at Bear Stearns Asset Management, before the hedge funds collapsed in July 2007. After discussing the funds' performance, the markets, and how much investors were asking to pull out of the hedge funds, Marin testified that he decided to recommend to his superiors at Bear Stearns that the investment bank put an additional $25 million into the funds. The purpose of this investment, Marin said, was to show investors that the bank had confidence in the funds and the funds' return to profitability.

WHAT HELPED THE PROSECUTION:

Marin testified that a redemption notice is the same as a redemption. He may be talking semantics, but this is an important point for the U.S. government. Prosecutors have been arguing that Cioffi and Tannin lied to investors about the number of redemptions the funds were seeing (i.e. how much money investors were pulling out of the funds), in the months leading up to the funds' collapse, because the two hedge fund managers were afraid this information would cause more investors to pull out of the fund. The defense has been trying to show that Cioffi and Tannin didn't technically lie about the redemptions because investors often filed 'redemption notices' and then decide ultimately not to pull their money out. Prosecutors asked Marin, 'If you put in the redemption notice, it is still a redemption?' Marin said, 'Yes.'