Wall Street's Trials Continue

When should Wall Street come clean to investors with bad news? What about catastrophically bad news? These are some of the questions observers hope will be answered in the long-awaited trial of Ralph Cioffi and Matthew Tannin, two former Bear Sterns executives charged with securities fraud for their attempt to keep two doomed Bear hedge funds afloat, setting in motion the collapse of the investment bank 18 months ago. According to the Wall Street Journal, the verdict could go a long way toward determining disclosure rules between Wall Street firms and their clients. "This case will be viewed by many as a test of where the boundary lies between acceptable, positive spin and outright fraud," David Siegal, a former federal prosecutor, tells the WSJ. "Much of the government's case appears poised to rely on what many previously believed was just spin."

There are already concerns about whether the Bear duo can receive a fair trial. "Unfortunately, the defendants wear the scarlet 'IB' (for) investment banker across their chests and this is a problem for them," James Cox, professor of law at Duke University in Durham, North Carolina, tells Reuters. "Juries have not been very friendly to executives who are seen as poster children for an ongoing financial climate."

Wall Street this weekend is mourning the passing of a giant and is concerned about the health of another. The New York Times carries an obituary this morning for Lionel Irwin Pincus, founder of Wall Street heavyweight Warburg Pincus. The 78-year-old Pincus "played a role in changing federal regulations on investing" and made scores of successful bets over the years, investing in companies such as 20^th Century Fox, Humana (HUM), Mattel (MAT), and Mellon Bank. Meanwhile, 61-year-old Bruce Wasserstein, chairman and CEO of Lazard (LAZ), was hospitalized on Sunday night with an irregular heartbeat. "His condition is serious, but he is stable and recovering,” Lazard said in the statement distributed through Business Wire, Bloomberg writes. Wasserstein is also the owner of New York magazine, Bloomberg notes, and he was one of the parties interested in snatching up Business Week from McGraw-Hill (MHP) recently. 

Buyers wanted: U.K. banking giant Barclays is preparing to offload a $7 billion portfolio of complex credit assets as it tries to clean up its balance sheet and "ease shareholder concerns over its investments," the Financial Times reports. Stanford University has similar plans, though on a smaller scale. It intends to sell $1 billion of its $12.6 billion portfolio of assets, including holdings in private equity, venture capital, timber, oil and gas, and real estate, CNN Money reports. The sales comes at a time when Stanford has seen the value of its endowment drop 30 percent. Meanwhile, Blackstone plans to publicly list up to eight companies it owns while selling at least five others in a sure sign that this most bearish of buy-out firms believes the worst of the financial crisis is over, the FT notes.

West African deep-water oil has long been viewed as a major opportunity for an exploration industry starved of easy pickings, and now the long-percolating geopolitical battle between the United States and China over the region's oil rights seems to be coming to a boil. The WSJ reports that China National Offshore Oil Corp. is in "advanced talks with the Ghana National Petroleum Corp." to challenge the $4 billion bid recently submitted by Exxon Mobil Corp. (XOM) for a stake in the new, giant Jubilee oil field recently discovered off Ghana's Atlantic coast. As the WSJ writes, "The emergence of Chinese companies as eager bidders for global energy assets, in Ghana and elsewhere, is a significant challenge to Western oil companies' traditional dominance."

Brace yourself, T-Mobile Sidekick users. Microsoft (MSFT) and T-Mobile this weekend have come clean that a technical glitch "has likely caused the loss of contacts, photos and other personal data for users," the WSJ reports. For the past week Sidekick users were having difficulty accessing their stored contacts, which are preserved online on Microsoft servers. Access has been restored, but those Sidekick contacts and other data may be lost for good, the companies divulged over the weekend. "The foul-up is a major embarrassment for Microsoft at a time when the Redmond, Wash., company is seeking to turn around its mobile phone offerings, which have stumbled in recent years," the WSJ writes.