U.S. SEC expects to proceed with Bear Stearns case

WASHINGTON (Reuters) - U.S. securities regulators intend to proceed with their civil case against two former Bear Stearns fund managers who were acquitted of related criminal charges earlier this week.

"We filed a case based on the evidence from our investigation," Robert Khuzami, the enforcement chief at the U.S. Securities and Exchange Commission, told Reuters TV on Thursday. "We fully expect to proceed with our case."

On Tuesday, a New York jury found the former Bear managers Ralph Cioffi and Matthew Tannin not guilty of securities fraud, wire fraud and conspiracy.

They had managed two hedge funds that were full of subprime mortgage-backed securities and which the government said led to $1.6 billion in losses for investors when they collapsed in mid-2007, in the early stages of the financial crisis.

It was the first major criminal trial to arise from the financial meltdown, and was seen as a test case for prosecuting people for their roles in the crisis.

"We will study the transcript and events at trial, but I fully expect us to continue our case. We have a different standard of proof," Khuzami said.

Lawyers for Cioffi and Tannin could not immediately be reached for comment.

Some have questioned whether Tuesday's decision would make authorities less likely to proceed with other cases. Khuzami rejected that suggestion.

"The fact that these two individuals were acquitted from the charges ... doesn't mean that somebody alleged to be engaged in other misconduct should not be prosecuted because there was an acquittal," he said. "Nor does it mean that, if there was conviction, that other people should be prosecuted."