Arab Today, arab today bankers\ deal is bad news for investors
Last Updated : GMT 10:54:50
Arab Today, arab today
Arab Today, arab today

Bankers\' deal is bad news for investors

Arab Today, arab today

Arab Today, arab today Bankers\' deal is bad news for investors

Washington - Arabstoday

Once again, the Securities and Exchange Commission (SEC) has embarrassed itself. Last week it let off the hook two hotshot former Wall Street hedge-fund managers who lost a bundle for the investors trusting them to manage their money responsibly. Instead of going to court on February 13 and laying bear the sordid facts for a jury, at the last minute the SEC settled a civil suit against Ralph Cioffi and Matthew Tannin of the now defunct Bear Stearns. These were the hedge-fund managers who five years ago loaded up their two funds with billions of dollars of lousy mortgage-backed securities and collateralised-debt obligations, leveraged them to the hilt and, when the market for the securities soured in July 2007, liquidated the funds. According to the SEC\'s 2008 civil complaint against the men, the collapse of the funds cost investors at least $1.6 billion. These problems were among the very first indications that serious trouble was looming in the housing market and securities tied to it. The liquidation of the two funds led to the effective bankruptcy of Bear Stearns itself in March 2008 and the subsequent financial crisis that nearly wiped Wall Street off the face of the earth. But the price the SEC extracted from Cioffi and Tannin as part of a settlement — after previously telling the court it intended to go to trial — was a mere pittance, \"chump change,\" according to the judge in Brooklyn overseeing the case. Victory for lawyers Cioffi, who made $22 million (Dh80.78 million) in 2005 and 2006 at Bear Stearns, will pay $800,000 and agree to a three-year ban from the securities industry. Tannin, who was paid $4.4 million in his last two years at Bear, will pay $250,000 and agree to a two-year ban. Neither has to admit to wrongdoing. In combination with their November 2009 jury acquittal on criminal charges in federal court, the SEC civil settlement provides a major victory for the defendants\' attorneys, Hughes Hubbard & Reed LLP (for Cioffi) and Brune & Richard LLP (for Tannin). The American public, on the other hand, is left with the trillion-dollar bill. This outcome is beyond outrageous. In its complaint, the SEC flat-out stated that Cioffi and Tannin mislead their investors: \"Particularly during the first five months of 2007, as the funds suffered increasing losses to the value of their portfolios and faced growing margin calls and redemptions senior portfolio manager Cioffi and portfolio manager Tannin deceived their own investors, as well as the funds\' institutional counterparties, by fraudulently concealing from them the full extent of the funds\' deepening troubles.\" One of the ways Cioffi and Tannin did this was by displaying, graphically, on the monthly account statements the percentage of the funds invested in subprime mortgages. For instance, according to an investor\'s statement from March 2007, the amount of the funds invested in subprime mortgages was stated clearly as 6 per cent. But when the funds blew up, Bear Stearns created internal \"talking points\" memos for how to deal with investor complaints. A memo from June 2007 pointed out that one of the questions deemed likely to be asked was: \"I thought the fund was diversified, and now it turns out it seems to have had a fair amount of exposure to the subprime mortgage market. What exactly was the exposure?\" The answer: \"60 per cent.\" In other words, Cioffi and Tannin told their investors the funds were diversified — and raised billions of dollars based on that representation — but in reality they were highly concentrated in subprime mortgages. And now, thanks to the SEC\'s settlement, the two men may never even be held remotely accountable. John Worland, the SEC\'s attorney, defended the agency by saying that it has no ability to sue for damages, only for the disgorgement of ill-gotten gains. Then Worland delivered this stunner: \"Neither Mr Cioffi or Mr Tannin got rich.\" We are all worse off for the SEC\'s continued lax enforcement of wrongdoing on Wall Street. If it won\'t protect us from charlatans, who will? Judge Block, please deny the proposed pathetic settlement and send the parties back to the negotiating table or, even better, your court room

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today bankers\ deal is bad news for investors Arab Today, arab today bankers\ deal is bad news for investors

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today bankers\ deal is bad news for investors Arab Today, arab today bankers\ deal is bad news for investors

 



Arab Today, arab today
Arab Today, arab today Designer Aql Faqih aspires to innovation

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation
Arab Today, arab today Italy regions back 'big bang' autonomy

GMT 07:10 2017 Monday ,23 October

Italy regions back 'big bang' autonomy
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Syrian children die of hunger

GMT 19:25 2017 Sunday ,22 October

Syrian children die of hunger
Arab Today, arab today Maltese demand justice for murdered

GMT 06:08 2017 Monday ,23 October

Maltese demand justice for murdered
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today World's deepest lake in peril

GMT 15:54 2017 Friday ,20 October

World's deepest lake in peril
Arab Today, arab today Ex-French minister Dati wants tough action

GMT 10:54 2017 Thursday ,19 October

Ex-French minister Dati wants tough action
Arab Today, arab today Delhi braces for pollution 'airpocalypse'

GMT 16:07 2017 Friday ,20 October

Delhi braces for pollution 'airpocalypse'
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Tesla to build wholly-owned plant

GMT 07:55 2017 Monday ,23 October

Tesla to build wholly-owned plant
Arab Today, arab today EU raids automaker BMW

GMT 11:06 2017 Saturday ,21 October

EU raids automaker BMW
Arab Today, arab today Rogina happy for reactions to “The Flood”

GMT 09:30 2017 Friday ,20 October

Rogina happy for reactions to “The Flood”
Arab Today, arab today Massacre fears spark race

GMT 19:09 2017 Thursday ,19 October

Massacre fears spark race

GMT 08:15 2017 Thursday ,19 October

Actress Mona Zaki praises husband’s role

GMT 18:15 2017 Monday ,16 October

British actress becomes fifth woman

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam

GMT 16:00 2017 Wednesday ,18 October

Climate-disrupting volcanoes helped topple

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 06:07 2017 Sunday ,22 October

15,000 Under Fives Die

GMT 12:54 2017 Saturday ,21 October

Malaysia Airlines picks new CEO

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 20:46 2017 Thursday ,19 October

Qualcomm files lawsuits in China to ban iPhones

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday