Cityfile: New York's Most Notable and Influential

Cioffi, Tannin Go Free | Ralph Cioffi and Matthew Tannin, the former Bear Stearns execs charged with conspiracy, securities fraud and wire fraud in connection with the collapse of the two hedge funds they managed, were acquitted on all counts in federal court this afternoon. So much for the "first major test of a U.S. effort to obtain convictions tied to the subprime mortgage crisis and subsequent recession"! [Reuters]

• Julianne Moore's West Village townhouse is up for sale. Moore picked up the five-story, six-bedroom home on West 11th Street for $3.5 million in 2003. It can now be yours for $11.95 million. [NYO, Sotheby's, Curbed]
• Emeril Lagasse has closed on the purchase of developer Penny Bradley's 6,900-square-foot townhouse at 158 East 61st Street for "around" its most recent asking price of $11.5 million. Now that he's found a new place to store his pots and pans, the chef and Food Network fixture has put his condo at the Beekman Regent up for sale for $5.995 million. [NYP, BHS]
• Chris Burch, the entrepreneur and ex-husband of Tory Burch, has picked up a new Hamptons home. Burch paid "around $9 million" for the Southampton estate of disgraced Bear Stearns exec Ralph Cioffi. The property had been listed at $10.7 million when it went into contract last month. [NYP]More

• Ralph Cioffi, the former Bear Stearns hedge fund manager who will stand trial this fall for securities fraud and conspiracy in connection with the collapse of the fund, has gone into contract to sell his 7,000-square-foot home in Southampton. The estate had been listed most recently for $11.875 million. Given Cioffi's desperate circumstances, it's expected that the final price will be below the $10.7 million that Cioffi paid for the home in 2007. [WSJ, Sotheby's]
• The couple who paid $9 million for hedge fund manager James Torrey's East 66th Street duplex in April, former Merrill Lynch exec John Heimann and his wife Maria-Cristina Anzola, have sold their old apartment at 141 East 72nd Street. The four-bedroom co-op was purchased by Ada Zambetti, the widow of Stella D'Oro CEO Felice Zambetti, for $5.625 million. [Cityfile]
• Billionaire pharmaceutical mogul Michael Jaharis has paid $6.7 million for a 3,335-square-foot apartment at 1049 Fifth Avenue. [NYO]

• House and Senate leaders have sorted out an arrangement to prop up Fannie Mae and Freddie Mac. [WSJ]
• Yahoo reported that revenue during the second quarter grew just 6 percent compared to a year ago, and that net income dropped 19 percent. [NYT]
• John Paulson is planning a new hedge fund. [Bloomberg]
• Google is in serious discussions to acquire Digg for "around $200 million." [Techcrunch]
• Former Bear Stearns hedge fund manager Ralph Cioffi has a new lawyer, Brendan Sullivan of Williams & Connolly, the same man who defended Oliver North. [NYT]
• The controversy over George Bush's comments about Wall Street getting "drunk" continues. [Dealbreaker]

Bear Stearns execs Ralph Cioffi and Matthew Tannin were led off in handcuffs a couple of weeks ago, accused of deceiving investors in one of the firm's ill-fated hedge funds. Bayou Group founder Samuel Israel III turned himself in last week after spending a few weeks on the run, and has started a 20-year sentence for defrauding investors of $450 million. (He now faces an additional 10 years for bail-jumping.) Plenty of other financial big wigs may ultimately get caught up in criminal probes, making 2008 one of the busiest years for white-collar defense lawyers, at least since the Drexel Burnham boys headed to the clink in the early '90s. A word of caution, though, to high-finance criminals facing the prospect of time behind bars. You do not want to show up to prison totally unprepared a la Sherman McCoy in Bonfire of the Vanities. Certain matters should be taken into account before you head off to the clink. There are even ways to parlay your riches and master-of-the-universe shtick into preferential treatment! Tips for disgraced Wall Streeters on how to survive behind bars after the jump.More

Remember Jeffrey Epstein, the "billionaire" financier and Bill Clinton pal who was busted in 2006 for his sexual relationships with underage girls? Two bits of news about the secretive mogul came to light today. First off, it turns out he was an investor in the ill-fated and scandal-plagued Bear Stearns hedge fund managed by Ralph Cioffi and Matthew Tannin. It seems poor Jeff lost a bundle when the fund imploded last summer—some $57 million. Even worse, though, is that today marks the day when he is expected to turn himself in to the police in Palm Beach and immediately begin serving an 18-month sentence for soliciting an underage prostitute. (Where, we're guessing, he won't be able to waltz around in a "JEE" monogrammed fleece as he is on the left.) As awful as that all is, we can't help but think about what a crappy month it's been for Epstein's former pal, Ron Burkle. He now has multiple (former) friends behind bars. And there are a bunch of other people who probably regret ever hooking up with the supermarket billionaire. More

• Ten percent of Citi's investment banking division will lose their jobs in the coming weeks. [Bloomberg]
• The same figure is floating around the offices of Goldman. Despite better-than-expected second quarter numbers, the fall-off in M&A is forcing the bank to conserve costs. [FT]
• SEC Chief Christopher Cox is coming under fire for keeping a low profile during the Bear Stearns meltdown and not doing more to ensure confidence in the system. [WSJ]
• Former Bear Stearns hedge fund manager Ralph Cioffi used his homes in New Jersey and Naples, Fla. to secure his $4 million bond. He also owns an estate in Southampton, which he purchased for $10.7 million in 2007. [NYP]
• Commercial real estate prices in Midtown are dropping fast. Rents are down 7% so far this year. [Crains]

And there they go: Ralph Cioffi and Matthew Tannin, the former Bear Stearns hedge fund execs who now face charges of misleading investors, on their way to be fingerprinted before being transported to Brooklyn federal court. Our question: What do you wear when you know the six FBI agents on your doorstep are going to lead you through a gaunlet of reporters on your way to court? We're going to have to hand this one to Cioffi (left) who decided to go business-casual for the occasion. A much more effective way to convey the I'm-relaxed-because-I'm-innocent look, if you ask us.

Former Bear Stearns Fund Managers Arrested by FBI [Bloomberg]

• Fallout from Morgan Stanley's disappointing quarter. To add to the mess, John Mack is now dealing with the discovery that a rogue trader lost $120 million. [NYP, WSJ]
• Ralph Cioffi and Matthew Tannin, who operated the two collapsed Bear Stearns hedge funds, have surrendered to face criminal charges. [NY Sun]
• John Paulson of Paulson & Co. says the worst is yet to come. [FT]
• More chatter about Dick Fuld and his plans to merge or sell of Lehman Bros. [Dealbook]
• Leon Black's Apollo has filed suit to extricate itself from a deal to buy Huntsman [WSJ] 
• Steve Feinberg's Cerberus has been sued over the failed buyout of United Rentals [Reuters]