What Saved Bear Stearns' Managers From Jail?

Former Bear Stearns Cos. hedge fund managers Ralph Cioffi, left, and Matthew Tannin, right, are...

Former Bear Stearns Cos. hedge fund managers Ralph Cioffi, left, and Matthew Tannin, right, are escorted out of 26 Federal Plaza in New York, U.S., in these file photos taken June 19, 2008. Cioffi and Tannin were found not guilty Nov. 10, 2009, of misleading investors who lost $1.6 billion, the first major test of a U.S. effort to obtain convictions tied to the subprime mortgage crisis and subsequent recession.

(Daniel Acker/Bloomberg via Getty Images)

How the prosecutors must have wished to have a go at Ralph Cioffi in the flesh! If only Cioffi and Matthew Tannin, the two Bear Stearns fund managers acquitted yesterday of insider trading and other charges, had had the gall to take the stand in their own defenses and to submit to what the Feds must have hoped would be a withering cross-examination. Well, no such luck.

White-collar crime is by its nature often not the stuff of high drama in the courtroom, but what makes it fun is that so many defendants, convinced they can impress a jury with their authority, sincerity, and intelligence, take the stand. Then, most often, they go to jail. There were the grand pooh-bahs of Enron, Jeffrey Skilling and (RIP) Ken Lay. There was the awful performance of Tyco's Dennis Kozlowski. There was one-time billionaire Bernie Ebbers of Worldcom, who lost the white-collar trial lottery with a 25-year sentence. There was Martha. All of them decided it was best that a jury should hear their story their way, and all of them went to jail.

Cioffi and Tannin didn't testify. Neither did HealthSouth chief Richard Scrushy, who managed to elude conviction on charges linked to financial shenanigans at HealthSouth despite the testimony of no fewer than five of the chief financial officers who'd served under him. (He did, however, eventually go to prison on an unrelated and very controversial bribery charge.) Frank Quattrone, the king of Silicon Valley investment banking, came within a hairsbreadth of turning an obstruction-of-justice case he was close to winning into a loss when, on the stand, he gave the prosecutors an opening with a rehearsed and evasive performance—though he finally ended up with a slap on the wrist after a mistrial and an overturned conviction.