Feds May Change Tactics After Bear

Feds May Change Tactics After Bear - 11/12/2009

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HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

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Feds May Change Tactics After Bear
Kaja Whitehouse

New York Post. November 12, 2009
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EXCERPT: When it comes to nailing Wall Street's bad actors, Uncle Sam may soon decide it's better off taking the civil approach. Experts say the government went too far in bringing a criminal case against two former Bear Stearns hedge fund managers. On Tuesday they were acquitted on charges they lied to investors about the health of their funds, which imploded in the subprime crisis. The Brooklyn jurors who cleared Ralph Cioffi and Matthew Tannin on all charges, including securities and wire fraud, said they weren't convinced beyond a reasonable doubt. "I think this verdict should cause the Justice Department to step back and analyze how they are proceeding," said Brad Simon, a former federal prosecutor in New York. "We of course respect the criminal verdict. But at this time we expect to go forward with litigating our civil action," said John Nester, SEC spokesman. Similar cases could be shunted to the Securities and Exchange Commission. The SEC can only press civil charges, but those cases come with a lower burden of proof. "Beyond a reasonable doubt is a very high standard of proof," said Treazure Johnson, a securities lawyer in Washington and former enforcement official with the commission. "They might re-look at some of those cases and decide they would have better luck bringing civil charges." Others who have been accused of failing to warn investors of the impending losses include Angelo Mozilo, former CEO of Countrywide Financial, and Dick Fuld, former CEO of Lehman Brothers.

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