Jury Finds Former Bear Stearns Fund Managers Not Guilty of Fraud

Submitted by Colleen Lutolf on Tue, 11/10/2009 - 16:24

A jury in a Brooklyn Federal District Court on Tuesday found two former Bear Stearns hedge fund managers not guilty of fraud charges, according to the New York Times.

The Times writes: "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."

Jurors found Ralph Cioffi and Matthew Tannin not guilty of conspiracy and other charges in an alleged fraud that cost 300 investors about $1.6 billion and nearly caused the demise of Bear Stearns itself, the Associated Press reported. The firm barely avoided bankruptcy in a rescue buyout by JPMorgan Chase & Co. The jury began deliberating on Monday.

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