Bear Stearns Managers Acquitted of Fraud Charges

Bear Stearns Managers Acquitted of Fraud Charges

www.nytimes.com

A jury in Federal District Court in Brooklyn decided Tuesday that the two managers — Ralph R. Cioffi and Matthew M. Tannin — did not lie to investors by presenting an upbeat financial picture without disclosing that the two hedge funds they managed were plummeting in value and that Mr. Cioffi had already pulled some assets from one.

(visit the link for the full news article)

I want to be fair. But I am a bit disappointed that the jury was convinced that these 'financial managers' were not guilty of misrepresenting the facts.

Two jurors were dismissed by the Judge prior to the decision because they had expressed some undefined 'bias' in the events on Wallstreet.

I find myself wondering - does this mean it IS true that the government cannot conduct a case against the economic masters? The New York Times implies it proves they can....

Why do I feel the opposite is true?

www.nytimes.com
(visit the link for the full news article)

reply to post by Maxmars


the link states:

"The case was the first against high-profile Wall Street executives charged with fraud stemming from the financial crisis.
And in many ways, it was a test of whether the government can successfully prosecute financial fraud in an era when complex investments like collateralized loan obligations and subprime mortgages can confuse jurors with little background in finance

it seems the defendents lawyers were great in their Jury selection,
it also seems the impaneled jury drank some sort of hypnotic tea or something

as far as being unsophisticated with complex financial instruments.
the jurors seemed to have been bamboozled by deft attorneys telling them that Hedge fund managers don't see 'a money losing trend' as a bad thing...and that the fund manager liquidating a great portion of his investment capital is a good strategy designed to benefit the fund in question.

Wow... i'm flabberghasted at the commoners not finding these two millionaires , guilty of fraud

I'm of the belief that if the case involves a rather large player, they cannot allow for the defendent to lose, lest the courts be inundated with charges against every broker, analyst and investment house that has a client who lost money.

Hedge funds are a somewhat dicier situation in that they aren't very regulated and the funds are only supposed to take on accredited investors.
(
www.sec.gov... defines accredited investor but, below, are the two items referring to individuals.

a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase;

a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or

)

This doesn't give them the right to screw their investors but, still, there's no a whole lot that can be done to pursue legal remedies in these cases unless there's blatant criminal activity (Giachetti, Madoff etc) and, even then, it takes a lot to prove it. Remember, the folks who manage these ginormous funds are not stupid. They know what they are doing and, if they are bending or breaking laws, you can be sure they are doing their best to make it seem as if they are not.

yes, the Hedge Fund investors themselves were well-heeled individuals

excerpt =

Prosecutors had claimed that the fraud cost 300 investors about $1.6 billion

300 players/investors with $1.b billion , sets the stage as a bunch of multi-millionaires not playing nicely.

however 'Justice' is supposed to be blind, and stupid rich people should be protected from shrewd, manipulating rich people..
even if the Hedge Fund 'rules' are somewhat laxer than in the broader investment community.


Oops, my bias is starting to show

How nice for them.Another wonderful example of justice for the nation to curdle under. And while this behavior pushes yet another unknown "regular" citizen to the edge of snapping out they'll have their celebration tonight and argue over the tab,
"oh no I insist let me take care of that, after all money is no object" a ha ha ah aha, yes yes actually I'll just write it off on my taxes as a legal expense, ha ha ah youre such a clever man"
Pricks and my old mother's 401k couldnt feed a cat for a year.

In choosing peers for the jury, perhaps average joe isnt quite who should be asked to try and understand the world of hedge funds.

Put in a some people with a background in economics, and we have ourselves a different outcome.

It appeared clear cut, they sold to investors, they knew it was failing=Fraud