Former Bear Stearn Execs Not Guilty
STEVE INSKEEP, host:
Lets hear more now, about the verdict in the first big trial related to the collapse of the subprime mortgage market. Two former Bear Stearns hedge fund managers were found not guilty yesterday. Ralph Cioffi and Matthew Tannin were accused of misleading investors about the health of their funds. Investors lost $1.6 billion. From member station WNYC, Lisa Chow reports.
LISA CHOW: The verdict came relatively quickly. After seven hours of deliberations, Cioffi and Tannin looked at the jurors without much expression at first. But as the foreman repeated not guilty for each of the six charges they both finally broke into a smile. Their wives, and even some of their lawyers, immediately started to cry. Cioffi and Tannin didn't speak to reporters afterwards. But Cioffis lawyer said he was glad the jurors listened. And Tannin, in a written statement, said, quote, My family and I are eternally grateful.
The U.S. attorneys office said it was disappointed with the outcome, but that it accepts the jurys verdict and that enforcing and protecting honesty and integrity in the financial markets will continue to be one of the offices main priorities.
Mr. RYAN GOOLSBY (Juror): Well, it was really fraud. Thats what we were looking at.
CHOW: Ryan Goolsby was one of the jurors at the trial.
Mr. GOOLSBY: Were these statements meant fraudulently? Were they trying to deceive investors in terms that make gains for themselves? And we just did not see that.
CHOW: Goolsby also criticized the governments use of selected quotes from emails, saying they were taken out of context. Serphaine Stimpson was another juror.
Ms. SERPHAINE STIMPSON (Juror): They were optimistic about their (unintelligible). They, you know, they built it. And I don't think they ultimately believed that this was going to fail.
CHOW: Daniel Richmond is a law professor at Columbia University and a former federal prosecutor in Manhattan. He says the government, in this case, did have a cooperator - someone saying this is how we planned to commit these crimes. Prosecutors relied more on circumstantial evidence. And Richmond says that hurt them.
Professor DANIEL RICHMOND (Law, Columbia University): I think when jurors, in the face of massive financial losses and massive allegations of financial wrongdoing in the economy, probably were surprised to find this was the level of proof the government brought forward.
CHOW: Richmond says the acquittal is a setback for the U.S. Attorneys Office, because it undermines its strong record on convictions and its credibility in future cases.
Prof. RICHMOND: I think it will cause prosecutors to be a lot more careful at the strength of the cases they bring and be very focused on the readiness of jurors to look past massive investor loss.
CHOW: The defense attorneys clearly won sympathy for their clients. Aram Hong was another juror who had a message for the two men.
Ms. ARAM HONG (Juror): If I can talk to Cioffi and Tannin right now, I would just be like, you know, everybody has hurdles in their life and this is one of yours. Just hopefully, theyll be able to bounce back.
CHOW: Cioffi and Tannin still face several civil lawsuits by their funds investors and lenders.
For NPR News, Im Lisa Chow in New York.
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