U.S. Loses Bear Stearns Case

" 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."

" Date yeah. That -- study -- is going to get funds yeah I gotta tell you this was a stunning defeat any got to wonder I mean they get the -- business still investigating. Lehman Brothers AIG Fannie Mae Freddie -- that's -- it daddy gotta wonder what this vertical due to those cases what the effect will have an impact it will have wouldn't I."

" I don't think I have any effective if they have competent attorneys that shouldn't have any effect at all. And you may be aware that I've been expert witness in some cases as an example of Merrill case. That on the surface -- very. Complicated. Is a class action suit from the shareholders. And the underlying issue was -- Merrill accounted properly for me these complicated collateralized debt obligations. And Merrill settled that case is settled at for a 550 million dollars but that's the difference between attorneys know what they're doing the you know the issue -- they know what to look at."

" I tell you can't imagine I'll let you know when they might -- something I've talked to the FBI they actually have. Agents who specialized in terrorism you know tracking them -- not having -- honeymoons are hollow laws they're they're working these sudden -- securitization cases it's pretty tough to find the bad -- senate -- finger of the guys who if you can't by the fingerprints on these in these pools of money but -- you know we really welcome you to the show we're always happy to have you on the show you've been terrific. Your great friend of Fox Business it's good to see tonight thanks for joining us."

" Thank you."