Bear Stearns pair were 'trying to do their best,' court told

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The Independent Online

The Bear Stearns hedge fund managers accused of defrauding investors are innocent of the charges, a defence lawyer told a New York jury, because "no one can lie about the future".

Matt Tannin and Ralph Cioffi did not realise that their funds were doomed, and were only doing their best in a highly uncertain market, according to Susan Brune, acting for Mr Tannin.

Concluding opening statements in the first trial of bankers at the heart of the credit crisis, Ms Brune described her client as "a thoughtful person who worries", saying that the government has taken his email jottings out of context.

The government arrested and charged Mr Tannin and his boss, Mr Cioffi, after finding emails that showed them discussing their fears for the sub-prime mortgage market while telling investors that their funds remained a good investment opportunity. The funds collapsed in July 2007, costing investors $1.6bn (£984m) and sending an early shockwave through credit markets. Opening the trial on Wednesday, prosecutors accused the men of repeatedly lying to investors.

Mr Tannin, 48, and Mr Cioffi, 53, face charges including securities fraud, wire fraud and conspiracy.

"No one can lie about what the future will bring because nobody knows what the future will bring," Ms Brune said. "This is a case about risk. It's about taking risks and making money, lots of it, and it's about taking risks and the loss of money, lots of it. It's a case about trying to do your best."

Bear Stearns collapsed within nine months of the funds' bankruptcy, after a run on the bank, and was sold to JPMorgan Chase.

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