The arrests of Bear Stearns portfolio manager Ralph Cioffi and hedge fund exec Matthew Tanin stand as an omen of sorts. We've said before that prosecutorial activity always follows upheaval and mayhem, and the on-going credit crunch qualifies. Of course, it was those two now infamous Bear Stearns hedge funds with the long names that started it all. The issue is whether the arrested former managers deliberately lied to investors, saying that they were comfortable with the assets even as they knew they were tanking. Prosecutors say Cioffi moved $2 million of his own money out of one fund while he still had a rosy face on for customers. As usual, email will figure prominently. This seems to be part of a larger probe of the whole credit crunch. There may be others in similar straights. You have to wonder if we will see more criminal indictments. We don't how high up the food chain the government wants to go. You can bet they've gotten an earful from investors who felt wronged. Hang on.

For more:
- here's an AP article