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Lawyers for ex-Bear Stearns managers complain of paper storm

March 17, 2009|Associated Press

NEW YORK — Lawyers for two former Bear, Stearns & Co. hedge fund managers charged with lying to investors about the collapse of the subprime mortgage market complained Monday that the prosecution had hampered their defense by burying them in an avalanche of nearly 9 million pages of documents.

The defense asked a federal judge in Brooklyn to order the government to tell them which of the evidence mattered.

"Discovery in this matter has left the defense looking for a needle in a haystack," lawyers for Ralph Cioffi, one of the defendants, wrote in a pretrial motion. "The government . . . has refused to provide any guidance to the defense as to what within this mountain of discovery really is at issue."

Prosecutors said they had given their counterparts about 8 million documents, but the defense said the number was closer to 9 million.

The government also said the defense had failed to produce relevant computer files and other information still in its possession.

Cioffi and Matthew Tannin were accused last year of encouraging investors to stay in their hedge funds even though the two allegedly knew the market for mortgage-backed bonds was in serious trouble.

The defendants face fraud and conspiracy charges and are free on bond. Their trial is tentatively scheduled to begin Sept. 28.

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