Bear Stearns Hedge Funds
Zamansky & Associates filed the first among a series of claims against Bear Stearns on behalf of investors in the firm’s High-Grade Structured Credit Strategies Fund and High-Grade Structured Credit Enhanced Leveraged Fund. The firm is representing individual and institutional investors who claim Bear Stearns did not fully disclose risks and executed unauthorized trades.
Moreover, federal prosecutors and the SEC have filed criminal and civil charges against the funds’ head managers Ralph Cioffi and Matthew Tannin. The criminal and SEC developments could bode well for investors seeking recovery of losses through the arbitration process. Tannin and Cioffi will be called to testify in arbitration hearings before their criminal trials take place and likely will exercise their Fifth Amendment rights against self incrimination. Attorneys can ask the arbitration panel to take what’s called an “adverse inference”, which means panelists can assume that if the defendants answered the questions, rather than pleading the Fifth, the answers would have adversely affected their interest.
Though Bear Stearns collapsed spectacularly and was taken over by JP Morgan Chase, our arbitration proceedings and future filings will proceed. In fact, as part of the deal, JP Morgan Chase set aside $6 billion “pretax for litigation, losses on sales of Bear assets and back-office and other consolidation expenses.”
Claims continue to be filed and we are aggressively pursuing cases that will return money to those investors who invested in either of the High-Grade Structured Credit Fund and the High-Grade Structured Credit Enhanced Leveraged Fund.