Jimmy Cayne and Alan Schwartz, Bear Stearns’ last two CEOsLegal issue: During the week leading up to Bear’s fire sale to J.P. Morgan Chase, Schwartz—who succeeded Cayne as CEO in 2008—repeatedly assured investors that the firm had ample liquidity.

Possible charges: Securities, mail, and wire fraud.

The PR headache: As the first big firm to fall, Bear Stearns has become synonymous with the meltdown.

The investigation: Two Bear hedge fund managers are under indictment for making sunny statements to investors while privately expressing doubts.

Jury deliberation: “Once you get past gigantic arrogance, do I think these guys did anything wrong? Hell, no.” ... “You could say the market got away from them. But if the markets are moving faster than you can comprehend, you have to say that to the world.”

Odds of prosecution: 2:3

The verdict: The notion that Bear was the victim of short-sellers might save these
two from prosecution.