NEW YORK, June 19, 2008 (PRIME NEWSWIRE) -- 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.
For more information, please visit www.subprimelosses.com.