It is a very depressing thing when the two highest-level Wall Street executives charged in the wake of the subprime crisis happen to come from the same bank. Even worse when government prosecutors, not content to tar and feather said executives in public for several days, hint they are putting together a second-round slew of indictments.

A week after two Bear Stearns hedge fund managers were arrested for allegedly misleading their investors, prosecutors are looking to add to the indictments, NPR has learned. The new charges — which could come as early as this week — would be related to their relationship with banks.

Officials close to the investigation told NPR that the U.S. Attorney's Office for the Eastern District of New York is pursuing additional indictments against Ralph Cioffi and Matthew Tannin. They pleaded not guilty to an initial round of charges which allege they misled investors about the financial health of two of their hedge funds. Now, investigators are gathering evidence on whether the two men purposely misled banks who were providing lines of credit and guarantees for the two funds in spring 2007. The funds had a great deal of exposure to bonds backed by subprime mortgages.

Officials have been speaking to representatives from Barclays, Merrill Lynch and Bank of America, among others. Barclay's has already sued the two fund managers in civil court. Sources say Bank of America was considering doing the same. Bank of America guaranteed and sold collaterized debt for Cioffi and Tannin's two funds. Officials there now say Cioffi and Tannin misled them.

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