Bear Stearns Fund Manager Trial Gets Interesting Before It Begins

We're still about a month away from the start of the Cioffi/Tannin trial. For those who don't recall, the collapse of two Bear Stearns hedge funds in 2007, run by Ralph Cioffi and Matthew Tannin, marked the official beginning of the credit crisis. Mr. Cioffi and Mr. Tannin are facing charges of conspiracy, securities fraud and wire fraud in a nine-count indictment in a criminal case that cost investors more than $1 billion. In retrospect, what's $1 billion after everything that's happened since? But given the lack of criminal charges brought against wrong-doing since the crisis began two years ago, at least somebody's going to trial.

The defendants have asked the federal judge to keep from introducing evidence during their trial next month that Mr. Tanin's computer and trading notebook disappeared. Apparently, the defendants believe that it might look as if the computer and trading notebook were purposefully disposed of to keep damning evidence from surfacing, when really it was just an innocent mistake. I mean, really, I lose notebooks and computers every single day and I'm not being criminally prosecuted for anything. So, I can totally understand how Mr. Tannin, after finding out that prosecutors were investigating him, might have accidentally bludgeoned his laptop with a hammer, before trying to flush it, before driving to a remote location to bury it.

Mr. Cioffi has a more general request of the judge. He would like the court to preclude the government from discussing settlements between Bear Stearns and investors and to exclude evidence concerning Mr. Cioffi's lifestyle, including discussions of furniture, antiques, automobiles and real estate. I suppose Mr. Cioffi is worried about being considered guilty-as- charged once the jury hears tales of the lavish lifestyle that he lived at the expense of his investors, and ultimately, the American taxpayer. Maybe he threw a $2 million party in Sardinia that was videotaped and we'll get to watch it on CNBC over and over again, like Dennis Kozlowski of Tyco fame? Mr. Kozlowski is doing 25 years after being found guilty of siphoning millions from Tyco's coffers, owing mostly to that video tape that I'm sure the jury had a hard time forgetting. Regardless, Mr. Cioffi seems to understand that a "jury of his peers" might not include a bunch of hedge fund managers who live similar lifestyles, but instead a bunch of angry populists bearing pitch forks. I, for one, look forward to reading about this trial