Bear Stearns Loss Echoes Long Line of U.S. Prosecution Defeats

“One common thread tends to be that the government either did not charge correctly by overcharging, or did not put on a good case,” said Jacob Frenkel, a former federal prosecutor.

In the Bear Stearns trial, prosecutors seemed to have done both, according to the jury. The government charged Cioffi, 53, the portfolio manager for the two funds, and Tannin, 48, their chief operating officer, with lying about the prospects of the funds, mostly made up of subprime mortgage-backed securities.