NEW YORK, June 19, 2008 (LAWFUEL) — A four-law firm legal team
(www.subprimelosses.com) with nationally recognized securities law
experience, asserts that the criminal indictments that were announced
today of the former managers of the Bear Stearns hedge funds show that
the game was rigged and that the interests of investors were sacrificed
so that the manipulators of this apparent scheme could enrich
themselves.
In the 28 page indictment, federal prosecutors from the Office of the
United States Attorney, for the Eastern District of New York, charged
Ralph R. Cioffi, Jr., a resident of Tenafly, New Jersey, with four
counts of securities fraud. Matthew Tannin, a resident of New York
City, was charged with three counts of securities fraud. Mr. Cioffi and
Mr. Tannin were portfolio managers of the Bear Stearns High Grade
Structured Credit Strategies Fund and the Bear Stearns High Grade
Structured Credit Strategies Enhanced Leverage Fund.
Mr. Cioffi and Mr. Tannin were charged with conspiracy to commit
securities fraud and wire fraud, securities fraud in connection with
the High Grade and Enhanced funds and wire fraud. Mr. Cioffi was
separately charged with insider trading.
The law firms of Maddox Hargett & Caruso, P.C., of New York City and
Indianapolis, Indiana; Aidikoff, Uhl & Bakhtiari, of Beverly Hills,
California.; Page Perry, LLC, of Atlanta, Ga.; and David P. Meyer &
Associates Co., LPA, of Columbus, Ohio, have previously filed a number
of arbitration claims with the Financial Industry Regulatory Authority
(FINRA) against two subsidiaries of Bear Stearns Companies, Inc. —
Bear Stearns & Co., Inc. and Bear Stearns Securities Corp. — and the
portfolio managers for the Bear Stearns High Grade Structured Credit
Strategies Fund and the Bear Stearns High Grade Structured Credit
Strategies Enhanced Leverage Fund — Ralph R. Cioffi Jr. and Matthew M.
Tannin — over the collapse last year of both Bear Stearns hedge funds.
Bear Stearns has previously disclosed that the events leading up to the
demise of the Bear Stearns High Grade Structured Credit Strategies Fund
and the Bear Stearns High Grade Structured Credit Strategies Enhanced
Leverage Fund — and the management of both funds by portfolio managers
Cioffi and Tannin — are the subject of a number of regulatory
investigations by the United States Securities & Exchange Commission,
the Office of the Secretary of the Commonwealth of Massachusetts and
other authorities.
According to Steven B. Caruso of Maddox Hargett & Caruso’s office in
New York City, “These indictments clearly indicate that officials at
Bear Stearns engaged in a concerted effort to conceal the true state of
affairs at their hedge funds, for an extended period of time before
they imploded, and that, as a result of the apparent desire of these
managers to enrich themselves in what now appears to have been a rigged
game, the financial interests of victims of this nefarious scheme —
including both individual investors and professional money managers
from around the world, were sacrificed.”
Added Ryan Bakhtiari of Aidikoff, Uhl & Bakhtiari, “Given Bear Stearns’
dominance in the mortgage-backed and derivative securities underwriting
markets and their purported reputation for integrity in the hedge fund
arena, these indictments strongly suggest that when their reputational
facade is stripped away, what remains is nothing more than an
investment firm failing to adequately protect the interests of their
clients.”
The legal team pursuing the arbitration claims includes the immediate
past president and several current and former directors of the Public
Investors Arbitration Bar Association (PIABA), the co-chairman of the
American Bar Association Securities Arbitration Subcommittee, the
current chair and past members of the FINRA National Arbitration and
Mediation Committee (NAMC), a former general counsel of a national
brokerage company, a former state securities commissioner, and a past
member of the NASD Securities Arbitration Policy Task Force.
