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13 Oct 2009

Hedge Fund Manager's Email Scrutinised For Knowledge of Downturn

The jury selection has begun for the trial of two former Bear Stearns hedge fund managers, Matthew Tannin and Ralph Cioffi, over the alleged hedge fund securities and wire fraud.

Although the prosecution alleges that the hedge fund managers misled investors, they are not being charged with having contributed to the collapse of Bear Stearns. They could face up to 20 years in prison if convicted. Cioffi is charged with an additional count of insider trading for withdrawing $2m from one of the hedge funds.

Tannin's personal Email, which he used as a diary, is being used to prove that he was worried about a possible "blow up" and was under some stress. The evidence also alleges that he had trouble sleeping and was taking some anti-anxiety medication.

The trial is expected to last six weeks. Tannin and Cioffi have denied the charges.

Hedge Fund Group Fortress Announces Pricing of RailAmerica, Inc. IPO

Fortress Investment Group LLC announced that RailAmerica, Inc.'s initial public offering of 10,500,000 primary shares of common stock, as well as the offering of 11,500,000 secondary shares of common stock of RailAmerica, Inc. by RR Acquisition Holding LLC, an entity wholly-owned by certain private equity funds managed by an affiliate of Fortress Investment Group LLC.

The shares were priced at $15 per share. Fortress funds acquired the company in February 2007 and will continue to own approximately 55.8% of RailAmerica after the closing of the offering.

In connection with the offering, RailAmerica, Inc. granted the underwriters a 30-day option to purchase up to 1,575,000 additional shares of common stock, and RR Acquisition Holding LLC granted the underwriters the option to purchase up to 1,725,000 additional shares of common stock, to cover over-allotments, if any.

The shares will begin trading on October 13, 2009 on the New York Stock Exchange under the symbol "RA." The offering is expected to close on October 16, 2009.