Legal Research

Bear Sterns Charges: Test Case On E-Mail Evidence

By David Badertscher, PLL

Source: Crime and Justice News, June 20, 2008.

"Last year, as the mortgage market came unglued, two Bear Stearns executives shared their growing fears in a series of e-mail messages to each other about the perilous condition of the giant hedge funds they oversaw, says the New York Times. Ralph Cioffi and Matthew Tannin presented an upbeat picture to worried investors without disclosing that the two funds were plummeting in value and that Cioffi had already pulled some assets from one of them. A little more than a month later, the funds imploded, evaporating $1.6 billion of investor assets."

"Yesterday, Cioffi and Tannin surrendered on federal charges of securities, mail, and wire fraud. The Times says theirs is likely to become a test case of the government's ability to make successful prosecutions of arcane financial transactions. There is no guarantee that cases that rely on e-mail exchanges and unclear states of mind result in jail time. In one prominent case involving e-mail exchanges, charges were dropped against Frank Quattrone, the Credit Suisse banker accused of interfering with a government investigation. Some high-profile cases, like this one based on e-mail exchanges and complicated financial arrangements, were successfully challenged".

New York Times

Full post as published by New York Supreme Court Criminal Term Library on June 20, 2008 (boomark / email).