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| Bear Stearns ex-managers arrested | |
| (about 1 hour later) | |
| Two former managers at investment bank Bear Stearns have been arrested in New York over the collapse of the bank's hedge fund last year. | |
| Reports say Ralph Cioffi and Matthew Tannin will face charges in connection with their management of hedge funds that collapsed in June 2007. | |
| The bank's hedge funds bet on the high-risk sub-prime mortgage market in the US before it collapsed. | The bank's hedge funds bet on the high-risk sub-prime mortgage market in the US before it collapsed. |
| Authorities in Brooklyn are due to give details about the case later. | Authorities in Brooklyn are due to give details about the case later. |
| FBI spokesman Jim Margolis told the BBC the men faced criminal charges of "securities fraud related to their management of two Bear Stearns hedge funds". | FBI spokesman Jim Margolis told the BBC the men faced criminal charges of "securities fraud related to their management of two Bear Stearns hedge funds". |
| The men are due to appear in the US Federal Court in Brooklyn later this afternoon local time. | The men are due to appear in the US Federal Court in Brooklyn later this afternoon local time. |
| If charged, the men would become the first Wall Street executives to face criminal charges related to the US sub-prime mortgage crisis. | If charged, the men would become the first Wall Street executives to face criminal charges related to the US sub-prime mortgage crisis. |
| Sub-prime mortgages, loans issued to people with a poor credit history, were repackaged as securities and sold across the globe. | Sub-prime mortgages, loans issued to people with a poor credit history, were repackaged as securities and sold across the globe. |
| The collapse of these hedge funds preceded Bear Stearns' own demise earlier this year. | The collapse of these hedge funds preceded Bear Stearns' own demise earlier this year. |
| In March, JP Morgan agreed to buy Bear Stearns with backing of the US Federal Reserve. The deal was approved by Bear Stearns shareholders last month. | In March, JP Morgan agreed to buy Bear Stearns with backing of the US Federal Reserve. The deal was approved by Bear Stearns shareholders last month. |
| Bear Stearns was one of the most high-profile victims of the credit crunch, which was triggered by bank losses linked to the US housing market. | Bear Stearns was one of the most high-profile victims of the credit crunch, which was triggered by bank losses linked to the US housing market. |
| The Fed took swift action over the situation at Bear Stearns to prevent problems spreading to the rest of the international financial sector. | The Fed took swift action over the situation at Bear Stearns to prevent problems spreading to the rest of the international financial sector. |