Well-known lawyer joins ex-Bear manager's defense: source : US Business

By Martha Graybow

NEW YORK (Reuters) - Veteran U.S. lawyer Brendan Sullivan is joining the defense team of indicted former Bear Stearns hedge fund manager Ralph Cioffi, a person close to the matter said on Tuesday.

Sullivan, a trial attorney who has represented high-profile clients including Iran-Contra figure Oliver North, will be an addition to Cioffi's existing defense team, said the person, who spoke on condition of anonymity.

Cioffi and another former Bear Stearns portfolio manager, Matthew Tannin, were charged in June with conspiracy and securities fraud related to last year's collapse of two hedge funds linked to risky mortgage investments.

The case is the first major criminal prosecution announced by federal prosecutors stemming from the subprime mortgage meltdown.

A phone message left for Sullivan, of law firm Williams &Connolly LLP in Washington, D.C., was not immediately returned. Cioffi, whose home phone number in Tenafly, New Jersey, was not publicly listed, could not be reached for comment.

Prosecutors from the U.S. Attorney's Office in Brooklyn, New York, contend that Cioffi and Tannin misled investors about the hedge funds' prospects while at the same time knowing the funds were in poor financial health.

Cioffi, who had been the funds' senior portfolio manager, also faces an additional insider trading charge. He is accused of transferring a portion of his own investments from one of the funds without telling investors.

Cioffi is also represented by Edward Little, of law firm Hughes Hubbard in New York. No trial date has yet been set.

Sullivan's other clients have included former New York Stock Exchange Chairman Richard Grasso in his battle with the New York attorney general's office, which had brought a civil lawsuit against Grasso over his pay package. He has also represented former U.S. Housing Secretary Henry Cisneros, once a close adviser to former President Bill Clinton, in an obstruction-of-justice case.

(Reporting by Martha Graybow, editing by Maureen Bavdek)

(c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.