Epstein Secrets

ABS Funds while there was an opportunity to do so. Arbitration Provision 12. Pursuant to the Customer Agreements between Bear Stearns and FTC and Bear Stearns and COUQ, "... controversies arising between [Claimants] and your introducing broker and/or Bear Stearns, and any of your or their control persons,

atively re-confirmed and that Bear Steams stood behind its valuations. In fact, Spector, following a pattern of deceit also practiced by Ciofli and Tannin, as the government's allegations detail, falsely told Epstein that Spector intended to purchase additional interests in the Enhanced Fund. Epstein d

its, his investments with Bear Steams were also guided by the "assurances, advice and representations" of 'other executives at the highest levels of Bear Stearns' management" Am. St. Claim 11 19 (emphasis added). -5- EFTA00314494 on big-picture issues of strategy and growth. The day-to-day management and ove

in repeatedly refers to Ralph Cioffi and Matthew Tannin, the Funds' managers, as "indicted fraudsters." As Epstein is now no doubt aware, Cioffi and Tannin were acquitted of all charges on November 10, 2009. 10 Epstein also alleges — correctly — that Spector approved an investment of $25 million of the

' Leveraging Practices 19 3. Bear Stearns' Backing of the Hedge Funds 20 E. Bear Stearns' Misleading Models and Inadequate Risk Management 23 I. Bear Stearns' Misleading Valuation and Risk Models 23 a. The Importance of Valuation Models 24 EFTA00316715 Case 1:08-cv-02793-RWS Document 102 Filed 02/27

the entire subprime market is toast ... If AAA bonds are systematically downgraded then there is simply no way for us to make money- ever." 201. Tannin concluded that "caution would lead us to conclude the [CDO report] is right and we're in bad shape." On May 13, 2007, Tannin reiterated to another B

aplan as an "instructor" • Might identify with JEE's life story. (presumably does SAT prep). For past 2-years • Probably not sympathetic to Bear Steams • "Freelance writer" too. • Hasn't had a real EFTA00584977 8 Public Arbitrator List Biographical Information Pro Con SC Recommendatio

s. Worked at UBS (3 years), Oppenheimer (I I years). • As a compliance executive, he might have spent a career watching folks like Coffi and Tannin cut corners and ignore folsk like him • • Industry insider Probably very conservative • Strike Kevin Natighten • • • • • Not a lawyer

Statement of Claim, Epstein began his career at Bear Stearns in 1977 after being personally recruited as a trader by Alan Greenberg ("Greenberg"), Bear Stearns' former Chairman. (ASOC ¶ 18). At Bear Stearns, Epstein traded options and served in the "special-products division," advising some of the firm's we

f the EL Fund to the indictment of Ralph Cioffi and Matthew Tannin, the portfolio managers of the HG Funds, it must be noted that Messrs. Cioffi and Tannin were acquitted of all charges on November 10, 2009.10 9 Every investor in the HG Fund was informed about the launch of the EL Fund, provided with th