Back in 2007, Ralph Cioffi, then a Bear Stearns hedge fund manager, redeemed $2 million from one of his hedge funds.  Associate Matthew Tannin received a $750,000 retention bonus.  According the SEC, both those amounts were used to determine how much the ex-managers would pay to settle SEC's securities-fraud charges - that they had misled investors about the funds’ deepening financial troubles and their own holdings in the investment pools. Cioffi’s disgorgement of $700,000 ... reflects losses he avoided by redeeming $2mn from a Bear Stearns fund in 2007 without telling his investors, the SEC said in a letter yesterday to U.S. District Judge Frederic Block, who has been delegated the task of approving (or disapproving) the settlement. Tannin's disgorgement of $200,000 ... in ill-gotten gains, reflecting part of that $750K bonus he received in 2007 for helping the company unwind the portfolios of its failed funds. Attorneys for the SEC and both defendants filed letters with Judge Block expressing support for the settlements, which include fines of $100,000 for Cioffi and $50,000 for Tannin.  In November 2009, a federal jury found Cioffi and Tannin not guilty of conspiracy and securities and wire fraud in the first criminal trial stemming from a federal probe of the collapse of the subprime-mortgage market.  Both men managed 2 hedge funds that filed for bankruptcy in July 2007. Block, who requested letters from lawyers on both sides ... before he rules, asked why the settlement was relatively small compared to the $1.8 billion the SEC said the funds’ investors lost.  The SEC can obtain only disgorgement of ill-gotten gains and civil penalties, not typically damages, the SEC lawyers said.  The disgorgement amounts were within the range of what they probably would recover if they tried the case, they said.  “Proof of losses by victims of a defendant’s securities fraud is not an element of an SEC enforcement action.” The case:  SEC v. Cioffi, 08-cv-2457, U.S. District Court, Eastern District of New York (Brooklyn). For further details, go to:   [Bloomberg, 2/22/12].