Ex-CEO Cayne acknowledges "leverage was too high" at Bear Stearns

James Cayne, former CEO at Bear Stearns, started his testimony before the Financial Crisis Inquiry Commission with a somewhat surprising statement. "In retrospect, in hindsight, I would say leverage was too high," he said. Cayne avoided taking blame for the leverage issue or others that led to the company's failure. "Bear Stearns' collapse was not the result of any actions or decisions unique to Bear Stearns," Cayne said. "Instead, it was due to overwhelming market forces that Bear Stearns, as the smallest of the independent investment banks, could not resist."

http://online.wsj.com/article/SB10001424052748703961104575226121352534794.html

Ex-CEO Cayne blames market for Bear Stearns' demise

James Cayne, former head of Bear Stearns, said the company's collapse was because of market forces and a loss of confidence in the bank, according to his prepared testimony to be given before the Financial Crisis Inquiry Commission. "The market's loss of confidence, even though it was unjustified and irrational, became a self-fulfilling prophecy," Cayne said in the testimony, according to a source. Alan Schwartz, Cayne's successor at Bear Stearns, and former President Warren J. Spector also are set to testify.

http://www.bloomberg.com/apps/news?pid=20601208&sid=a4wyRMfTzsaE

Bear Stearns managers found not guilty of fraud

Matthew Tannin and Ralph Cioffi, the two former Bear Stearns managers accused of securities fraud, have walked free after the jury threw out the case against them.

The pair had been accused on nine counts that alleged they had deliberately misled investors about the financial state of two hedge funds they ran.

But the jury took less than nine hours to return a not guilty verdict on all of the charges that had been made against them.

After the case, jurors told the media that the government's prosecution, which had been based on excerpts from emails between Tannin and Cioffi, had not given them enough evidence to go on.

Speaking to Bloomberg, one said that the men had been made "scapegoats for Wall Street".

Bear Stearns, which is now a subsidiary of JPMorgan Chase, recently reported net income of $3.6 billion for the third quarter of 2009, as it begins to recover from the financial crisis that first engulfed Tannin and Cioffi's hedge funds before resulting in the collapse of the company itself.

Bear Managers’ Acquittal May Hamper U.S. Fraud Prosecutions

A federal jury acquitted two former Bear Stearns hedge fund managers of defrauding investors. Ralph Cioffi and Matthew Tannin were found not guilty on all charges of conspiracy, securities fraud and wire fraud. They were accused of deliberately misleading investors before the financial crisis. "There wasn't enough evidence ... The e-mails went both ways," jury forewoman Jenny McCaughey said. Legal experts said the verdict might make prosecutors more hesitant about bringing charges against Wall Street managers who lost large sums in the financial crisis.

more at http://www.reuters.com/article/newsOne/idUSTRE5A94RW20091111

Former Bear Stearns hedge-fund manager Matthew Tannin smiles after being acquitted of fraud charges at U.S. District Court in Brooklyn, November 10, 2009.

What Went Wrong When Bear Stearns Fell?

It took 72 hours for Bear Stearns to crumble. In one day, Bear Stearns went from $18 billion in cash on hand to $3 billion, as investors panicked. Reporter Kate Kelly from the Wall Street Journal wrote about the final days of the investment bank's collapse in her book Street Fighters  and talks with host Kai Ryssdal about what happened.

http://marketplace.publicradio.org/display/web/2009/05/18/pm_streetfighters_q/