Bloomberg
Posted: 4:38 am
July 19, 2008
Former Bear Stearns Cos. hedge-fund managers Ralph Cioffi and Matthew Tannin, indicted for fraud and conspiracy last month in the first case stemming from a federal probe of the mortgage-market collapse, may face more charges.
The two men were accused June 19 of misleading investors about the health of two hedge funds that failed last year.
The implosion helped trigger the credit crunch and the eventual collapse and sale of Bear Stearns to JPMorgan Chase & Co.
"The government is indeed contemplating additional charges," Assistant US Attorney Patrick Sinclair said at a preliminary hearing in Brooklyn federal court, adding that any new counts would be added by "early fall." Sinclair declined to say what charges are being considered.
The government has been investigating possible fraud by banks and mortgage firms whose investments in subprime loans and securities plunged in value, causing losses that now total almost $450 billion.
Both men have also been sued by the Securities and Exchange Commission.
At the hearing, the men made their initial appearance before US District Judge Frederic Block, who would preside over any trial.
