Former Bear Stearns Cos. hedge fund managers Ralph Cioffi and Matthew Tannin, indicted on fraud and conspiracy counts last month in the first case stemming from a federal probe of the mortgage-market collapse, may face more charges.

The two men were accused June 19 of misleading investors about the health of two hedge funds that failed last year. The implosion led to Bear's eventual collapse and its sale to JPMorgan Chase & Co.

"The government is indeed contemplating additional charges," Assistant U.S. Attorney Patrick Sinclair said at a preliminary hearing Friday in federal court in Brooklyn, N.Y.

Any new counts would be added by "early fall," he said, declining to specify what charges are being considered.

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