Another US scandal
19/06/2008
Bear Stearns' former hedge fund managers Ralph Cioffi and Matthew Tannin were taken into custody by FBI agents over their roles in the collapse of two funds that ignited the subprime mortgage crisis last year.
The arrests are the first from a federal probe of possible fraud by banks and mortgage firms whose investments in subprime loans and securities plunged in value, causing losses that now total $396.6 billion.
The U.S. Securities and Exchange Commission may sue the two men, claiming they committed fraud by falsely telling investors the funds they managed were sound, people with knowledge of the case said.
