Forbes – The government cited what it claims are smoking-gun e-mails between the two fund managers. In at least one case, the government says Tannin wrote from his private Gmail account to Cioffi’s wife’s Hotmail account, declared the subprime mortgage market was going to “toast” and that its managers should “close the fund.” Prosecutors alleged these e-mails show that the defendants’ views internally were very negative at the same time they presented an optimistic front to investors.

As opening statements go, the prosecution’s was short at 45 minutes. By contrast, Cioffi’s lawyer, Dane Butswinkas, talked for two hours and used multiple charts and exhibits that sought to explain the complexities of Bear Stearns’ management structure, hedge funds and how the collateralized debt obligation market operated.

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Tags: fund-managers, hedge funds, investors, management structure