Cayman Net News- The multi-billion dollar collapse of two Cayman Islands hedge funds managed by investment giant Bear Stearns is set to continue to make headlines into the New Year.
As 2007 drew to a close, news was released that the US Attorney’s Office and the Securities and Exchange Commission (SEC) were looking at whether one of Bear Stearns’ senior managing directors, Ralph Cioffi, continued to promote the now-bankrupt funds while removing US$2 million of his own investments from them. The allegation being that this act amounted to insider trading.
Banking giants Barclays have now also joined the chase, filing claims for over CI$400 million, which allege Bear Stearns sold bad debt before they would have to be written down as a loss. Barclays alleges fraud, conspiracy and a breach of fiduciary duty.
Other groups are filing arbitration claims, a course they regard as more straightforward, quicker and not subject to complex appeal processes or legal delaying tactics, in order to recover lost investments.
