Bear Stearns ex-managers arrested

If charged, the men would become the first Wall Street executives to face criminal charges related to the US sub-prime mortgage crisis.

...regards To The Markets. The Manipulation Is Rampant And Obvious.

...China knows how to do it...

There needs to be ALOT more action by the FBI and SEC in regards to the markets. The manipulation is rampant and obvious.

The Wall Street Journal reported Thursday that authorities are expected to cite an e-mail from Mr. Tannin to Mr. Cioffi, suggesting that the market for their funds' investments was "toast" -- four days before they assured investors everything was fine.

Ralph Cioffi and Matthew Tannin, who managed Bear Stearns hedge funds before the subprime collapse, charged with lying to investors about mortgage market risk.

The FBI put the losses to homeowners and other borrowers who were victims in the schemes at over $1 billion.

"Mortgage fraud and related securities fraud pose a significant threat to our economy, to the stability of our nation's housing market and to the peace of mind of millions of Americans," Deputy Attorney General Mark Filip said in a statement Thursday.

Since March 1, 406 people have been arrested in the sting dubbed "Operation Malicious Mortgage" that saw 144 cases across the country. Sixty people were arrested on Wednesday alone, including in Chicago, Miami, Houston and a dozen other regions policed by the FBI.

The Justice Department and FBI plan to announce the recent arrests — including apprehensions in Chicago, Atlanta, Miami, and suburban Maryland — at a news conference set for Thursday afternoon in Washington.

An indictment unsealed in federal court charged both men with securities and wire fraud, and Cioffi with insider trading. The U.S. attorney's office in Brooklyn planned a news conference later Thursday.

In a separate complaint also filed Thursday, the Securities and Exchange Commission alleges that in the first five months of 2007, Tannin and Cioffi "deceived their own investors, as well as the fund's institutional counterparts, by fraudulently concealing from them the full extent of the fund's deepening troubles."

The complaint says that in March 2007, Cioffi withdrew $2 million of his own money from a hedge fund without revealing to investors that he was substantially reducing his exposure to the toxic loans.

"Cioffi's clandestine redemption caused the Enhanced Leverage Fund to pay out $2 million at a time when the markets were weak and the fund was facing another month of losses, as well as escalating margin calls and forced sales," the SEC said.

"Although Cioffi had lost faith in the funds, as evidenced by his own redemption from the Enhanced Leverage Fund, he nonetheless falsely expressed his supposed confidence in the funds, encouraging investors to add money to the funds and attempting to dissuade them from redeeming," the complaint said.

The complaint alleges Cioffi and Tannin revealed their secret doubts about the survival of the funds in internal e-mails.

It's reassuring that the whole thing was just a handfull of naughty managers at one bank and not a decade of massive consumer over spending on credit cards backed by home equity loans.
So once these guys are convicted the economy should just bounce back.

... the whole thing was just a handful of naughty managers at one bank and not a decade of massive consumer over spending on credit cards backed by home equity loans...

...An NPR news summary puts the number arrested by the FBI at over 400 since March of this year...

but yet I feel that adds to my feeling that there is total {maybe not total..} corruption within the higher level CEO types of big business and government...