Two Little Words: “Not Guilty” For Cioffi And Tannin

We are delighted to come out of hibernation and report the acquittal of former Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin by a federal jury in Brooklyn. The New York Post has the story here. It was obvious from the start that the case was weak and that the government was essentially trying to criminalize puffery. The Post takes the away the lesson that proving guilt in cover-up cases, as opposed to outright fraud cases,  will now involve a “high hurdle” because of the verdicts. I wouldn’t be so quick to draw this conclusion. As a general matter,  proving a cover-up is easier than proving a fraud. Every case is unique. One of the differentiating factors is the trial judge. Here, the defense was aided by, among other things, Judge Block’s key evidentiary ruling excluding a potentially damaging email written months before the hedge funds at issue collapsed. Sounds like the ruling was correct.