Sources: No Bear Stearns Indictment
Investment bank Bear Stearns – the collapse of which in March began the current Wall Street crisis – will avoid indictment by federal prosecutors examining possible wrongdoing by financial professionals, two anonymous sources tell the Washington Post. But two of its former fund managers are battling criminal charges for allegedly misleading investors about the financial health of their unit.
A pattern of prosecutors going after individuals, while sparing the companies they work for, is likely to develop as law enforcement probes of the mess on Wall Street expand, the paper reports. Last week, the FBI announced 26 investigations underway at companies including Fannie Mae, Freddie Mac, Lehman Brothers, and American International Group.
Investment bank Bear Stearns, the collapse of which in March began the current Wall Street crisis, will avoid indictment by federal prosecutors examining possible wrongdoing by financial professionals, two anonymous sources tell the Washington Post. But two of its former fund managers are battling criminal charges for allegedly misleading investors about the financial health of their unit.
A pattern of prosecutors going after individuals while sparing the companies they work for is likely to develop as law enforcement probes of the mess on Wall Street expand, the paper reports. Last week, the FBI announced 26 investigations underway at companies including Fannie Mae, Freddie Mac, Lehman Brothers and American International Group.
At an ABA conference yesterday, Deputy Attorney General Mark R. Filip promised there would be “no unwillingness to take the facts and the law where they lead.”
The financial health of a company must be taken into account by prosecutors, according to Department of Justice guidelines. “Given the current landscape, with Lehman in bankruptcy proceedings, Fannie Mae and Freddie Mac under federal control, and AIG surviving only after an $85 billion infusion from the Treasury, lawyers with experience in such cases predict few major criminal prosecutions of businesses,” the paper says.
A spokesman for the U.S. Attorney’s office in the Eastern District of New York, which is investigating Bear Stearns, refused to comment about its probe.
