read this one to the bottom....
By Colleen DeBaise
of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Michael Berger, the former hedge fund manager whose
Manhattan Investment Fund cost investors $400 million, indicated in court papers
that he was mentally incompetent when he pleaded guilty last year to securities
fraud.
Berger said he wasn't capable of pleading guilty because he suffers from both
bipolar and borderline narcissistic personality disorders. In court papers filed
last week, he petitioned U.S. District Judge Victor Marrero to withdraw his
guilty plea and have the case heard by a jury.
Berger, a 29-year-old Austrian, previously admitted in Manhattan federal court
to doctoring account statements so that investors wouldn't realize his Manhattan
Investment Fund had sustained enormous losses by betting against high-flying
Internet stocks.
In the recent filing, Berger also said he was denied access to "exculpatory
information" in the fund's office that would have proven Bear Stearns Cos.
(BSC), the fund's clearing broker, contributed to Manhattan's losses.
Among other things, Berger said his former defense attorney, Benito Romano, of
Willkie Farr & Gallagher, represented several Bear Stearns clients, and was more
interested in protecting those clients than Berger.
Berger said his ability to defend himself against the charges or reach a
cooperation agreement with prosecutors was impaired as a result of his
attorney's conflict of interest.
Romano, who last year withdrew as Berger's attorney, said, "To the extent
that's what his papers say, they're absolutely false."
Bear Stearns has long denied any wrongdoing in relation to the fund's
collapse. Earlier this year, a different federal judge dismissed Bear Stearns
from two investor lawsuits that accused the firm of bending margin rules on
Berger's behalf and warning preferred clients to withdraw their money before the
fund's collapse.
Prosecutors allege that Berger received more than $575 million from investors
and sustained heavy losses by pursuing a contrarian 'short-selling' strategy
against technology and Internet-related stocks. Berger bet against such stocks
between 1996 and 1999, when their prices were skyrocketing.
In his papers, Berger says he suffers from the disorders as a result of a
difficult childhood. He says he has a compulsive desire for admiration and an
irrational need to save people, which has caused him to give inordinate amounts
of money to his secretary and make friends with prostitutes.
end |
