Indicted Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin are now facing a lawsuit from Bank of America claiming that they misled BofA about the health of their two funds.
The most shocking part of this news: that it took BofA four months to file a lawsuit accusing Cioffi and Tannin of the same things the feds charged them with this summer.
WSJ: Bank of America Corp. filed a lawsuit against the asset-management unit of Bear Stearns Cos. and former fund managers Ralph Cioffi and Matthew Tannin, alleging they misled the bank about the financial health of two funds that collapsed last year, costing investors more than $1 billion.
Filed in U.S. District Court in Manhattan, the suit claims the Bear unit and its managers concealed from Bank of America that the funds were suffering substantial withdrawal requests from investors and were in imminent danger of collapse in the spring of 2007. The lawsuit alleges breach of contract and fraud.
Bank of America, based in Charlotte, N.C., structured and marketed a $4 billion securitization in May 2007 of mortgage-backed assets primarily owned by the two Bear-managed funds, according to the lawsuit.
“As a direct and foreseeable consequence of defendants’ misconduct, the bank sustained significant losses,” the suit alleges.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.