The collapse of Bear Stearns Cos. becomes more titillating every day as information surfaces that money manager Jeffrey Epstein, a favorite subject of gossip blog Gawker and the New York Post's Page Six, may have had a hand in its troubles.
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According to the Post, Epstein was "Major Investor No. 1" who lost $57 million in the collapse of the Bear Stearns hedge fund managed by Ralph Cioffi and Matthew Tanin, who were recently indicted for fraud. The pair are accused of misleading investors about the risky subprime mortgage market. In the indictment, the government identifies a victim as "Major Investor No. 1," which the Post confirmed was Epstein with his spokesperson, Howard Rubenstein.
Epstein has a long history with Bear Stearns, and began his career in finance at the firm in the late 1970s.
In related news -- the kind Gawker loves -- Epstein appeared in Palm Beach County, Fla., court Monday to plead guilty to felony solicitation of prostitution and procuring a person under the age of 18 for prostitution. He will serve 18 months in jail, and another year under house arrest. You didn't think Gawker was writing about finance, did you? - Matthew Wurtzel
See Page Six story from the New York Post
See Epstein story from DealBook
See related story about plea from the Palm Beach Post
See related story about Cioffi and Tanin from Dealscape
