After getting off to a rocky start — with even the judge questioning how the government was running its case — the prosecution in the trial of ex-Bear Stearns hedge fund managers scored a few points through witness testimony yesterday.
The witness, former managing director of Bear hedge fund sales Evan Kerr, testified that he told defendant Ralph Cioffi (pictured) that Concord Management had asked to withdraw $57 million just one week before Cioffi told investors he expected only “a couple of million redemptions” for the relevant period, Bloomberg’s Patty Hurtado reports.
Kerr said he had sent emails to Cioffi and co-defendant Matthew Tannin emails confirming Concord’s intent to withdraw the money in two separate exemptions on May 31 and June 30, so he contacted Cioffi after the call to question why he had said the amount of redemptions would just be a couple million.
Cioffi, Kerr said, responded that he had not seen Concord on the redemption sheet.
Concord also contacted Kerr after the call, and Kerr sent Cioffi an email saying, “Concord question, when you talk about redemptions and about ‘a few million’ they were a little taken aback by that.”
Cioffi responded asking whether Concord was redeeming in June or August; Kerr said testified, “Based on my belief and from e-mails, it was quite clear that it was May and June…I don’t know where August came from.”
The WSJ Law Blog, which has a summary of the case to date, notes that Cioffi’s lawyers have said Concord’s redemption request could have been rescinded and that after the investor call Cioffi, Tannin and Kerr met with Concord and that Cioffi thought was “a good start toward” keeping their money in the Bear fund.
Cioffi and Tannin are facing as many as 20 years in prison on charges of conspiracy, securities fraud and wire fraud for allegedly misleading investors about the health of the Bear funds.
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