Two former maangers of Bear Stearns are standing trial on charges of fraud and conspiracy.

The basic allegations are that they knowingly concealed problems of hedge funds managed by them from investors. These funds were connected to the high-risk sub-prime mortgages market.

Despite emails between them in which they spoke of the sub-prime losses being "far worse than anything people have modelled", they reported to Bear Stearns senior executives that the funds were in good shape and would continue to be successful.

The two, Ralph Cioffi and Matthew Tannin, are being tried in Brooklyn federal court.