NEW YORK, June 4, 2008 (PRIME NEWSWIRE) -- A four-law-firm legal team with nationally recognized securities law experience has filed additional investor claims against two subsidiaries of Bear Stearns Companies, Inc. -- Bear Stearns & Co., Inc. and Bear Stearns Securities Corp. -- and the portfolio managers for the Bear Stearns High Grade Structured Credit Strategies Fund -- Ralph R. Cioffi Jr. and Matthew M. Tannin -- over the collapse last year of a Bear Stearns hedge fund.
Arbitration claims were filed with the Financial Industry Regulatory Authority (FINRA) by the law firms of Maddox, Hargett & Caruso, P.C., of New York City and Indianapolis, Indiana; Aidikoff, Uhl & Bakhtiari, of Beverly Hills, California.; Page Perry, LLC, of Atlanta, Ga.; and David P. Meyer & Associates Co., LPA, of Columbus, Ohio.
The Bear Stearns hedge fund at issue in the latest FINRA claims is the Bear Stearns High Grade Structured Credit Strategies Fund, which imploded last summer, causing investors to have all of their capital wiped out.
Bear Stearns recently disclosed that the events leading up to the demise of the Bear Stearns High Grade Structured Credit Strategies Fund -- and the management of the fund by portfolio managers Cioffi and Tannin -- are the subject of a number of criminal and civil regulatory investigations by the Office of the United States Attorney for the Eastern District of New York, the United States Securities & Exchange Commission and others.
According to Steven B. Caruso, of Maddox Hargett & Caruso's office in New York City, "Our investigation indicates that officials at Bear Stearns engaged in a concerted effort to conceal the true state of affairs at this hedge fund, for an extended period of time before it imploded and that the victims of this nefarious scheme included both individual investors and professional money managers from around the world."
Added Ryan Bakhtiari, of Aidikoff, Uhl & Bakhtiari, "Given Bear Stearns' dominance in the mortgage-backed and derivative securities underwriting markets, we're finding, in our investigation of the circumstances that led to the demise of this fund, that many investors were simply unaware of what was being held in their portfolios and that Bear Stearns did not properly disclose related party transactions and the true nature of the risk of the illiquid securities in the fund's investment portfolio. In our opinion, this is a classic example of an investment firm failing to adequately protect the interests of their clients."
The legal team pursuing the arbitration claims includes the immediate past president and several current and former directors of the Public Investors Arbitration Bar Association (PIABA), the co-chairman of the American Bar Association Securities Arbitration Subcommittee, the current chair and past members of the FINRA National Arbitration and Mediation Committee (NAMC), a former general counsel of a national brokerage company, a former state securities commissioner, and a past member of the NASD Securities Arbitration Policy Task Force.
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