On April 22, 2007, Bear Stearns hedge fund manager Matthew Tannin sent an e-mail to fellow hedge fund manager Ralph Cioffi. “The entire subprime market is toast,” he said. “There is simply no way for us to make money — ever.” Three days after the now-infamous “toast” e-mail, Tannin reassured investors during a conference call, telling them he was “very comfortable with exactly where we are” and “there’s no basis for thinking this is one big disaster.”

Of course, it was indeed a big disaster. The hedge funds run by Tannin and Cioffi cratered, costing investors $1.6 billion and leading to the near-death of Bear Stearns, which was ultimately sold to JPMorgan Chase & Co. The fund managers were indicted for fraud and conspiracy in June 2008. On Tuesday their trial will begin in federal district court in Brooklyn — with Tannin’s e-mails front and center in the prosecution’s case.

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