Bear Stearns ex-managers arrested

[g33kski11z]

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

http://news.bbc.co.uk/2/hi/business/7463713.stm


.. its good to see that people that screw over others are {hopefully} getting what they deserve.

 

[Astronuc]

I heard about these two guys. I believe the particular investigation has been ongoing for more than one year, which means it predates the sub-prime crisis. There are other investigations ongoing as well.

FBI arrests 300 property players
http://news.bbc.co.uk/2/hi/business/7464298.stm


We had people from a local sheriff's office apparently looking for a body in the river. Apparently someone (one who is involved in some financial shenanigans) either committed suicide or faked a suicide and disappeared.

 

[Greg Bernhardt]

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

 

[WarPhalange]

Doesn't matter. They're going to get a slap on the wrist and then be on their way.

China knows how to do it.

http://www.nytimes.com/2007/05/30/world/asia/30china.html?_r=1&oref=slogin

Can you imagine anybody getting any sort of punishment in the government here in the US? The most you get is fired.

 

[g33kski11z]

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

Qft !

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

There isn't a lot about China I like, but I think they have the right idea !
{joking, some of their "capitol punishment" is over the line}

 

[WarPhalange]

What's not to like about Mobile Death Vans?

 

[Astronuc]

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

Certainly that is the issue here.

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.

http://money.cnn.com/2008/06/19/news/newsmakers/bear_stearns_investigation.ap/index.htm?dlbk

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

 

[edward]

There is a lot of blame to go around. Many local builders were requiring buyers to sign a document stating that they were going to live in the homes purchased.

It was done with a wink of the eye. I could drive through the new subdivisions and spot the flip homes. There would typically be one car parked on a clean driveway (no tire marks) for long periods of time. For that matter a lot of the sales people were involved in the flipping.

The no money down low interest rate adjustable rate mortgages made it all happen.

A lot of hard working honest people did live in the new homes and are now looking down the street at all of the houses in foreclosure, while their own home is now worth less than they paid for it.

 

[Astronuc]

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

http://www.npr.org/latestnews/#MT91692422

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.

http://news.yahoo.com/s/ap/20080619/ap_on_bi_ge/bear_stearns_investigation

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.

The FBI and SEC are going after financial managers. I suppose the FEDS could use RICO.

 

[mgb_phys]

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.

 

[edward]

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.

Consumers can't overspend without being enabled by the banks.

 

[g33kski11z]

... 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...

I laugh at your sarcasm, 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...

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

That's sad. I expect more from people and our government.

 

[mgb_phys]

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...

I was rather making the opposite point!
The cause of the problem is people assuming that their home equity was extra free money that could be spent on a new SUV/ big screen TV etc.
When they found out it wasn't they need someone to blame.
Obviously it can't be their fault so you need to find someone.
Nobody likes bank managers, so just find one who broke some rules and blame them.