CNN Money – Ralph Cioffi and Matthew Tannin, both former hedge fund managers at Bear Stearns, are accused of painting a rosy picture of their portfolios, even though “the defendants believed that the funds were in grave condition and at risk of collapse,” according to the prosecution.
Prosecutors blamed Cioffi and Tannin for causing Bear Stearns investors to lose more than $1 billion, alleging that their fraudulent behavior led to the collapse of their hedge funds and, subsequently, Bear Stearns. They have both pleaded not guilty and are out on bail: $4 million for Cioffi and $1.5 million for Tannin.
The trial is scheduled to begin Oct. 13 in U.S. District Court in Brooklyn, New York. Cioffi and Tannin could each face 20 years if convicted of securities fraud.