Janet Tavakoli and Fox’s Liz MacDonald Discuss the Outlook for Future Financial Crisis Prosecutions
Politics / Credit Crisis 2009 Nov 12, 2009 - 12:49 AM GMTBy: Janet_Tavakoli
" Prosecutors are still licking their wounds today after the US losses criminal case against two former Bear Stearns hedge fund managers for their role in the financial crisis last year. Now a jury acquitted them of all six counts of securities fraud this was a shock it shocked Wall Street when the verdict -- in. That these guys are walking -- angry investors get their pound of flesh from anyone. Shouldn't but let's get a topical issues better president -- technically structured finance and author dear mr. Buffett Janet welcome. I was telling you I'm great -- that we use surprised that a verdict."
" Well -- you know I didn't -- all aspects of the case but afterwards and reading what the prosecution dead. Restructuring their output where these guys -- where they Elaine. They -- relying on the wrong venue the wrong issues and the wrong evidence. So it's it's no surprise that they lost a case like that but there will be another trial the civil trial. And you know they need to look at the issues. Were the fund managers operating in the best interests of investors. And -- investing in the things that the investors expected them to invest in. First of all they had a lot of sub prime. In the portfolio and I know that firsthand as you well know was as well I actually talked about -- about that. When he called me up because he was distressed about something I told business week. About a deal he was trying to do which would have moved fund assets into. Basically the stock market. And when I looked at it they had forty to 50% sub prime and assets that they were moving and he was saying that he had very little sub prime investment. On the flimsy excuse that he was somehow -- And yet even the document said that it wouldn't be adequately hedged. And that is a public document so they're serious questions there and other serious question when I looked at that was that. You know that fund had been buying pretty Dicey product product as late as march 2007. When toffee and cannon are already worried about sub prime and you can't they looked at those assets and read the prospectus. They would have tossed it in the garbage I looked at one of those deals at the time that I made that.".....
By Janet Tavakoli
web site: www.tavakolistructuredfinance.com
Janet Tavakoli is the president of Tavakoli Structured Finance, a Chicago-based firm that provides consulting to financial institutions and institutional investors. Ms. Tavakoli has more than 20 years of experience in senior investment banking positions, trading, structuring and marketing structured financial products. She is a former adjunct associate professor of derivatives at the University of Chicago's Graduate School of Business. Author of: Credit Derivatives & Synthetic Structures (1998, 2001), Collateralized Debt Obligations & Structured Finance (2003), Structured Finance & Collateralized Debt Obligations (John Wiley & Sons, September 2008). Tavakoli’s book on the causes of the global financial meltdown and how to fix it is: Dear Mr. Buffett: What an Investor Learns 1,269 Miles from Wall Street (Wiley, 2009).
© 2009 Copyright Janet Tavakoli- All Rights Reserved
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