E-mails at Center of Bear Stearns Case

Former Bear Stearns' fund manager Manager Matthew Tannin e-mailed Ralph Cioffi that he was concerned that the complex bond securities in which they had invested were “toast” and  shows that prosecutors again plan to use individuals' e-mails to build a case against them, according to The Wall Street Journal.

Tannin wrote in an email sent from his personal account to Cioffi that the funds should be shut down. Cioffi replied, sugesting they meet that night in his New York home. In the days that followed, the pair told associates they had become convinced their concerns were unfounded and told investors on a conference call that he was "quite comfortable" with their holdings.

The e-mails are now considered key pieces of evidence in the case that they intentionally misled investors about the strength and performance of their two portfolios. E-mails have been used in civil cases brought against Henry Blodget, formerly of Merrill Lynch, and Jack Grubman, formerly of Citigroup.

Federal prosecutors are set to announce the indictments of the men in a Brooklyn N.Y. federal court today. Tannin was taken into custody from his New Jersey home this morning and Cioffi was arrested in his New York home.