U.S. prosecutors are preparing to file criminal charges against managers of two Bear Stearns hedge funds whose collapse helped kick off the credit crisis last year, the Wall Street Journal reported on Monday, according to Reuters. For those who remember the day to day events of last year the subprime markets was failing before the funds collapsed. Banks specializing in subprime, such as HSBC’s subsidiary HSBC Finance, has already announced major losses. But who cares about the exact timing – this is a major announcement as responsibility may have a high price.
Any indictments would be the first major criminal charges brought against Wall Street executives or fund managers stemming from the subprime mortgage crisis.
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Two former Bear Stearns managers have been arrested, federal authorities said Thursday, becoming the first executives to face criminal charges in the wake of the subprime market debacle.
Matthew Tannin was taken into custody outside his New Jersey home on Thursday morning and Ralph Cioffi was arrested at his New York City home, the FBI said.
The U.S. attorney’s office in Brooklyn said it planned to announce conspiracy and fraud charges later Thursday.