Atlanta-Based Federal Criminal Attorney Steps Up, Takes on Hard Cases

As one of the foremost Atlanta-based attorneys working in the white-collar criminal defense sector, Lawyer Jeff Manciagli prides himself up aiding the defensive efforts of the innocent, as well as the better end of the law’s long arm.

However, in many cases, Mr. Manciagli, criminal attorney in Georgia, comes across stories in his day that draw his ire, and in this instance, none more appropriate has presented itself in recent history.

Bear Stearns, one of the largest investment banks in the world, was sold to JP Morgan Chase, where after they effectively ceased operations and diminished their entity in March of 2008. This came on the heels of two Bear Stearns hedge funds, invested in collateralized debt obligations (mainly subprime home loans) once worth approximately $1.6 billion losing nearly all of their value.

The collapse of Bear Stearns was the harbinger for a succession of massive failures that played pivotal parts in triggering the current global recession. The collapse of Bear Sterns was followed by the implosion of financial institutions Lehman Brothers, Merrill Lynch and AIG, the last of which received a hefty bailout package from our new elect president.

As reported by New York Magazine, as well as Reuters and the Daily Telegraph, two hedge fund managers , Ralph Cioffi and Matthew Tannin were charged in June in the Eastern District of New York with several counts of wire and securities fraud allegedly misleading investors regarding the status of the funds in the Spring of 2007.

Cioffi, a hedge fund manager, and Tannin, the Chief Operating Officer of Bear Stearns Asset Management (BSAM), have pled not guilty. The collapse in value of the funds cost investors approximately $1.4 billion. When stock traders pursued selling a portion of the subprime mortgages contained within the fund, no investors came looking to buy.

The trial of Cioffi and Tannin is set to begin in October. The evidence against Cioffi and Tannin consists largely of e-mails between them and investors describing the funds as “an awesome opportunity,” despite allegedly knowing that the funds had problems.

Bear Stearns investors are expected to testify at the trial. Both men have consistently maintained their innocence. They face a potential 20 years in prison if convicted.

Cioffi is also charged with alleged insider trading for withdrawing $2 million of his own money from the funds. The government alleges that he engaged in hundreds of transactions involving the funds without the necessary approval by the fund’s directors and despite being warned about conflicts of interest.

All trades between Bear Stearns, a securities firm, and BSAM, an asset management firm, were supposed to be vetted by an independent committee. In the fall of 2006, Bear Stearns ordered a moratorium on such internal trades by Cioffi. Prosecutors sought to introduce evidence of Cioffi’s alleged insider trading in order to demonstrate how Cioffi allegedly operated.

British bank Barclays, a shareholder of one of the funds, also filed suit against Cioffi and Tannin for alleged fraud, however, the suit has been withdrawn.

The prosecution of Cioffi and Tannin makes conspicuously noticeable the fact that no senior executives from Bear, Lehman Brothers, AIG, etc., have been charged with any wrongdoing in the fallout from the financial crisis.

Atlanta Federal Criminal Defense Attorney Jeff Manciagli maintains that this ordeal is a travesty, and a letdown in the eyes of stock holders who trusted this firm.

For more information on Jeff Manciagli’s law firm, visit his website.