Two Former Bear Stearns Fund Managers Surrender in NYC

Two Former Bear Stearns Fund Managers Surrender in NYC

www.foxbusiness.com

Two former Bear Stearns managers have surrendered to face criminal charges in the wake of the collapse of the subprime mortgage market, federal authorities said Thursday.

A law enforcement official told The Associated Press on Wednesday that an indictment naming the men was the result of a year-long federal securities fraud investigation.

The former executives are suspected of misleading investors about the risky subprime mortgage market, the official said, speaking on condition of anonymity because the outcome of the investigation is pending.

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Barclays accused Bear Stearns of knowing for months that certain assets in the Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund were worth "far less" than their stated values.

The bank alleged Bear Stearns managers "hatched a plan to make more money for themselves and further to use the Enhanced Fund as a repository for risky, poor-quality investments."

Wait a minute.. These guys were being investigated for almost a year before their scam collapsed the subprime market?

While I'm glad they're being brought to justice finally, isn't there some responsibility for the securities fraud investigators to have stopped this before it went so far??

How much did this cost the US taxpayers in real terms - not just the 30 billion dollar Federal Reserve bailout, but the domino effect of all the losses in the real estate market, the business and employment losses caused by the credit crunch, the economic stimulus package, the loss in tax revenues, the added strain on welfare and social security, etc, etc...

You're telling me now this could have been AVOIDED???

www.foxbusiness.com
(visit the link for the full news article)

[edit on 6/19/2008 by mythatsabigprobe]

The investigating 'authorities' mentioned in the article, while unnamed, is surely the the same one that is packed with industry insiders.

They are placed there because they 'know' the system and are 'experienced' in the business. Yet, they are never fully vetted until after they are shown to drag their feet on cases like this. Industries CAN'T police themselves, so we create bodies of 'authority' to do the job; at which point our political leaders (pfft) appoint industry personnel to the 'job'. Go figure.

It's no wonder we don't ever 'prevent' these things from happening.