Chump Change: 2 former Bear Stearns managers settle SEC case ($1 Million fine for 1.8 Billion fraud)
http://www.reuters.com/article/2012/02/13/us-bearstearns-fundmanagers-idUSTRE81C1EI20120213?feedType=RSS&feedName=businessNews&utm_source=dlvr.it&utm_medium=twitter&dlvrit=56943
(Reuters) - Two former Bear Stearns fund managers, who were acquitted of criminal charges over the demise of their mortgage-laden hedge funds, agreed on Monday to pay more than $1 million to resolve a civil lawsuit brought by market regulators. The settlement with the U.S. Securities and Exchange Commission was announced on the day a trial on the lawsuit was scheduled to begin in Brooklyn, New York.
Ralph Cioffi and Matthew Tannin were found not guilty of all charges in 2009 in a parallel criminal case brought by the U.S. Department of Justice. The jury rejected prosecutors' arguments that the two men committed fraud by lying to investors about the health of their hedge funds, which were stuffed with securities backed by risky home loans. The funds imploded in mid-2007.
It was the first high-profile criminal prosecution of Wall Street executives stemming from the 2008 financial crisis, and the acquittals were a big blow to the government.
U.S. District Judge Frederic Block must sign off on the proposed settlement with the SEC, which was approved by the agency's commissioners at a meeting last week.
Block told lawyers for each side that he was inclined to approve the deal. But he criticized the proposed penalties as "chump change" compared to the $1.8 billion that the SEC says was lost by Cioffi and Tannin's investors when the two hedge funds collapsed.
snip