Wednesday, November 25, 2009

Who is the US?

"The US government lost the first major criminal trial spawned by the financial crisis as two former Bear Stearns hedge-fund managers were acquitted of securities fraud. Some prosecutors had viewed the case as a blueprint for future charges against Wall Street executives. ... The acquittals are a setback for the US attorney's office in Brooklyn, NY, which along with several other offices is investigating Wall Street for possible criminal wrongdoing stemming from the credit crisis, including at Lehman Brothers Holdings Inc. [LBHI] and [AIG]. ... There 'was nothing that was clear and convincing, said juror Tabasam Bhatti, a 31-year-old civil servant. ... The federal bailout of Wall Street has raised the ire of taxpayers and put pressure on the Justice Department to hold top executives accountable for the crisis. ... 'We're thrilled with the verdict,' said Susan Brune, a lawyer for Mr. [Matthew] Tannin. Messrs. [Ralph] Cioffi and Tannin [C&T] still face a civil-fraud lawsuit, which was brought alongside the criminal charges last year, by the [SEC]. John Nester, and SEC spokesman, said the agency expected to go forward with the litigation", my emphasis, Amir Efrati (AE) and Peter Lattman at the WSJ, 11 November 2009, link:

"The acquittals of two former Bear Stearns Cos. hedge-fund managers on securities-fraud charges is causing some soul-searching amid prosecutors who hope to hold Wall Street accountable for excessive risk-taking that helped lead to the financial crisis. ... This is particularly true for the investigations of former executives at [LBHI] and [AIG] which could be brought by the US attorney in Brooklyn, people famuilar with the matter have said. The Bear case was tried in Brooklyn. A spokesman for the Brooklyn US attorney declined to comment. ... Andrew Hruska, a former federal prosecutor [said] 'There's not as much unthinking animus [against Wall Street] by jurors as some prosecutors believe, and they can't just count on juries to gloss over facts that don't fit with the government's theory.' ... To be sure, the Bear case had certain unique characteristics, such as judicial rulings and expert witness testimony that was favorable to the defense. These advantages mightn't come into play in future cases. ... But the jury found that the emails, when read in their entirety, showed that the defendant's private ruminations weren't at odds with public comments", my emphasis, AE at the WSJ, 12 November 2009, link:

"The quick 'not guilty' verdict reached Tuesday afternoon by a Brooklyn jury in the federal criminal trial of two former Bear Stearns hedge fund managers was at once surprising--for its failure to comport with the zeitgeist--but also entirely understandable, based on a close reading of the prosecution's arguments and the evidence the judge allowed to be introduced. 'There was a reasonable doubt on every charge, one juror told the Times afterward. 'We just didn't feel that the case had been proven.' ... But the jury eventually saw the entire message, in which Mr. Tannin ruminated at length about various courses of action ans seemed to be striving to make the soundest financial choice. In other words, it was just about what you would hope your fund manager would be worrying about in a precarious time. ... For now, [C&T] remain the only bankers indicted for their professional behavior in what became one of the worst financial crises in our history", my emphasis, William Cohan at the NYT, 12 November 2009, link:

"The nasty juggernaut known as the US [DOJ] usually gets it man, regardless of whether or not the man targeted has committed any crimes. ... However, every once in a while, there is good news to report, and on Tuesday afternoon, the government's lousy case against former Bear Stearns hedge fund managers [C&T] was deep-sixed by a jury that could recognize the prosecutors' dearth of evidence. I don't have much confidence in federal juries, and I am sure that I never would be permitted to serve on one (Oh joy), but on this day, a federal jury in Brooklyn did its job and did it well. ... Second, they had a legal team that shot down everything that the federal prosecutors threw at them. Third, Judge Frederick Block could smell the dishonesty of the government's case and he was not afraid to do his job. Unlike most federal judges, Block did not see himself as being an arm of the prosecution, and that made a huge difference in the trial. Fourth, the government had no case. NO case. ... I closely followed this case and had a sense of where it was headed. (Interestingly, most of the media chose to present a rosy picture of the government's case, and at the breaks, reporters were seen laughing and joking with the prosecutors. ... However, the biggest howler came from prosecutors Illene Jaroslaw and Patrick Sinclair [J&S], who made off-the-record remarks that the Brooklyn jury was too unsophisticated to understand the intricacies of the case. ... First, and most important, the last thing that [J&S] wanted was for their presentation to be eye-glazing and they were hoping that the defense would present the argument that the securities markets were very complicated and maybe jurors should not try to figure out what constituted a crime and what was not a crime. ... Second, the reason that the trial was held in Brooklyn instead of Manhattan was because the court-shopping prosecutors wanted a Brooklyn jury, reasoning that a jury of working-class people would not be able to relate to a couple of once-wealthy Wall Street traders. [J&S] purposely wanted what they believed would be an 'unsophisticated' jury that would not understand the information the defense was going to present. Thus, to claim that the jury's alleged 'stupidity' was the reason that they lost is the ultimate proof that federal prosecutors are an arrogant lot", my emphasis, William Anderson at Lew Rockwell, 12 November 2009, link:

This case stank and always stank. C&T are "top executives"? It was brought to divert public attention from Vampire Squid's actions. It's the worst case since the Joe Jett fiasco, see my 8 August 2008 post:

Yes, Hruska, BC wanted the jurors to convict C&T for VS's actions. Soul searching by prosecutors? That presumes a fact not in evidence. Objection sustained. What is unique about "judicial rulings ... favorable to the defense"? What is AE saying about our federal judges? Hey, BC, did you ever hear of the Federal Rules of Evidence? Acquaint yourself with Rule 106, my 12 September 2009 post:

Was BC trying to deceive the jury into convicting C&T? I am clearly convinced. Why has no one else been indicted? This article was titled, "How the Scapgoats Escaped". Well done.

I despise federal prosecutors. To call them arrogant is a compliment. Every AUSA seems to think he's Albert Einstein. They're not. I haven't met an Einstein working for the DOJ yet.

1 comment:

Anonymous said...

Lalalala...Bear Stearns...

The head prosecutor sure has an impressive resume...

What happened with this case?