Bear Stearns manager 'didn't lie'

Matthew Tannin faces a possible prison sentence of 20 years

Former Bear Stearns hedge fund manager Matthew Tannin, facing charges of fraud and conspiracy, did not conspire with colleagues, his lawyer has said.

Tannin is on trial in New York with former colleague Ralph Cioffi, who is also charged with insider trading.

Much of the prosecution's evidence comes from emails sent by the two men.

Mr Tannin's lawyer Susan Brune said: "He tried to foster debate, think through all the options and he used emails to foster that kind of debate."

The two men managed two hedge funds that collapsed in 2007, costing investors between $1.4bn and $1.6bn.

The collapse of the two funds were major factors leading up to the collapse of Bear Stearns itself in 2008.

Prosecutors say that by mid-2007 Mr Tannin and Mr Cioffi were promoting their funds to investors, despite privately emailing their fears about trouble in the market.

In one email, sent on 22 April 2007, Mr Tannin wrote that if an internal company report on collateralised debt obligations (CDOs) was accurate "then the sub-prime market is toast" and the funds should be closed.

"Matt is trying to think about difficult things and he's getting some things wrong," Ms Brune told the jury. "That's not a crime, at least it shouldn't be."