Two former Bear Stearns fund managers agreed to pay more than $1 million combined to resolve a U.S. Securities and Exchange Commission lawsuit over allegations they lied about the health of two mortgage-laden hedge funds they managed, lawyers said on Monday.
The deal with the two defendants, Ralph Cioffi and Matthew Tannin, was announced on the same day a trial on the civil lawsuit was scheduled to begin in Brooklyn, New York.
Cioffi and Tannin were acquitted of criminal charges in 2009 in a parallel case brought by the U.S. Department of Justice.
The settlement with the SEC, which requires court approval, would also bar Cioffi from working in the securities industry for three years. Tannin would be barred for two years,
Neither defendant will admit or deny wrongdoing as part of the deal, lawyers said. Cioffi will pay $700,000 in disgorgement and a $100,000 civil penalty, while Tannin will pay $200,000 in disgorgement and a $50,000 civil penalty.
Bearn Streans, on the verge of failure because of losses on mortgage-related investments, was acquired by JPMorgan Chase in March 2008.
The case is SEC v . Cioffi, in the U.S. District Court for the Eastern District of New York, 08-2457.