Big questions after acquittals

As Wall Street continues to cheer, the jury acquittals of Ralph Cioffi and Matthew Tannin continue to reverberate. Business Week notes there are plenty of unanswered questions. Chief among them is whether and to what extent the two Bear Stearns hedge fund managers were responsible for massive losses at Citigroup (C) and Bank of America (BAC).

The fund put together some CDO deals that fueled the subprime mortgage frenzy and left Citi and Bank of America on the hook once the CDOs started to lose value. One massive CDO squared deal--which depends on CDSs--"was the final blow-out of Wall Street's excesses in subprime mortgage finance." 

These are serious issues but they are hardly jury friendly. "There's no telling what more the prosecutors, with their subpoena power, might have found out about these very transactions that undermined what used to be the two biggest banks in the nation. There's no telling because the prosecutors took the smaller matters to the jury, and lost." You can't blame the prosecutors. At the time, a simple story of black and white lies seemed like it would work best. 

For more:
- here's the article

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