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Ralph Cioffi Arrested for Role In Subprime Debacle 

Ralph Cioffi — a South Burlington native, St. Michael's College graduate and Bear Stearns hedge fund manager — was arrested this morning for his role in the collapse of two funds, sparking the global credit crisis that brought down the subprime lending industry.

Business Week did a pretty good job of explaining the investigation that led to the arrest of Cioffi and fellow fund manager, Matthew Tannin, who were both charged with eight counts of wire and securities fraud.

This report by Bloomberg found Cioffi, a member of St. Mike's Board of Trustees from 1992 to 1996, to be a well-regarded family man as well as "a pioneer" in structured finance.

Cioffi also was charged with insider trading. He allegedly pulled $2 million of his own $6 million investment in the hedge fundsinto another fund, even as he touted them to potential investors.

More details are expected from the U.S. attorney office in Brooklyn later today. 

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