More Wall Street prosecutions coming?
TEXT OF STORY
Tess Vigeland: It’s been one day since federal prosecutors charged two former hedge fund managers at Bear Stearns with fraud. They’re accused of deliberately keeping information from investors. Information that could have saved them millions of dollars in the subprime meltdown. Ashley Milne-Tyte has more.
Ashley Milne-Tyte: Bear Stearns executives may not be the last to face criminal charges on subprime losses.
Scott Meyers heads the litigation group at Chicago law firm Levenfeld Pearlstein.
Scott Meyers: There certainly are a number of other hedge funds that are in the mortgage-backed securities space. And there are a number of other mortgage originators and loan processors, many of whom have Wall Street connections. So I would not be surprised to see additional prosecutions on Wall Street related to this issue.
But securities lawyer Chris Bebel isn’t so sure.
Chris Bebel: The old saying is indict in haste, repent at leisure. These are very complex, detailed cases.
Bebel says it could be very tough to convince a jury the Bear fund managers committed fraud. He says if the government does follow up soon with other indictments, it might regret it later.
In New York, I’m Ashley Milne-Tyte for Marketplace.
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