Feb 9 Two former Bear Stearns hedge fund
managers who were acquitted of criminal charges in 2009 are
prepared to settle a civil case with U.S. market regulators over
subprime mortgage-backed securities, according to a person
familiar with the case.
If a settlement between the U.S. Securities and Exchange
Commission (SEC) and the two defendants is approved by a
Brooklyn, New York federal judge, the case will not go to trial
as planned on Monday.
The SEC was slated to vote on a settlement in the case on
Thursday, a person familiar with the matter confirmed to
News of the settlement was first reported by the New York
Times, which said the deal could be announced on Monday. The
deal is subject to court approval.
The Justice Department and the SEC brought parallel criminal
and civil charges against former Bear Stearns executives Ralph
Cioffi and Matthew Tannin in 2008.
Cioffi and Tannin were accused of lying to investors about
the health of their hedge funds, which were laden with complex
securities backed by subprime mortgages, the paper said.
However, a jury acquitted both men from criminal charges in
Despite the setback, the SEC maintained that it would
continue to pursue its case, the NY Times said.
SEC officials and a lawyer representing Tannin declined to
comment to Reuters. The attorney representing Cioffi was not
immediately available for comment outside of regular U.S.