Two former Bear Stearns fund managers were arrested earlier today (Thursday 19 June) for securities fraud.
Hedge fund managers Ralph Cioffi and Matthew Tanin were arrested after investors and creditors of two Bear funds lost $1.6bn (£820m) when the funds imploded in June 2007.
Cioffi and Tanin could be charged with securities fraud after they provided a positive outlook for the funds’ future shortly before they collapsed.
Edward Little, a partner at New York firm Hughes Hubbard & Reed is representing Coiffi while partners Susan Brune and Nina Beattie from Brune & Richard have been instructed by Tannin.
In a statement released by Hughes Hubbard, Little said: “Because his funds were the first to lose might make him an easy target but doesn’t mean he did anything wrong. Indeed, Mr Cioffi had no motive to do anything wrong. He did not and could not have profited by doing anything the government now claims he did.”
Brune & Richard’s Brune said: “Matthew Tannin is innocent. He is being made a scapegoat for a widespread credit crisis. He is looking forward to his acquittal.”