Tip of the iceberg?

From the NYTimes:

Two former managers of hedge funds at Bear Stearns were arrested and charged with securities fraud on Thursday, a year after the collapse of the funds signaled the onset of a credit crunch that shows little sign of abating.

The indictments, which were detailed this afternoon by federal prosecutors in Brooklyn, are the first to be brought against senior Wall Street executives linked to a tight credit market that has rattled global markets, led to more than $350 billion in write-offs, cost numerous executives their jobs and culminated in the demise of Bear Stearns.

The two funds had names as abstruse as the complex subprime securities in their portfolios - High Grade Structured Credit Strategies Fund, and its riskier sister offering, the High Grade Structured Credit Strategies Enhanced Leverage Fund.

And on Thursday, the two fund managers, Ralph R. Cioffi, 52, and Matthew Tannin, 46, who just 18 months ago reveled in their status as top hedge managers in a firm at the vanguard of the mortgage boom, surrendered to federal agents.

Like Enron several years ago and the insider trading scandals two decades earlier, the prosecution of the Bear Stearns executives is expected to become a test of the government's ability to make successful prosecutions of highly complex financial transactions.

Somehow this feels like the beginning of something rather than its end.

Thurs 430 Update - Apparently there is more, much much more, to come.


Credit Crunch - Job Losses.... by SarahAA (not verified)