Ralph Cioffi and Matthew Tannin are, presumably, a couple of smart guys. They have solid educations and for a while did well for themselves managing hedge funds on Wall Street. I'm thinking they're the sort of men who keep up with current events.

So, what's with the e-mail?

The feds arrested both this week at their homes, cuffed them for a perp walk and held a press conference to tout the case.

This pair of collared white collars are charged with lying to investors about the value of the Bear Stearns Cos. hedge funds they ran, the ones whose failures last June sent the sub-prime mortgage crisis into overdrive.

Their crime, the indictment says, is that they urged people to keep pouring in money when they knew the bottom was falling out.

The funds, once worth $20 billion, had invested heavily in sub-prime mortgages: a big mistake. Investors lost $1.6 billion, Bear Stearns collapsed and so did the sub-prime mortgage market, prompting almost $400 billion in write-downs to date.

So, can we blame Cioffi and Tannin for that? Why do we think they lied? In large part because of e-mail, the indictment says.

In those intimate, chatty electronic blips to each other, Tannin and Cioffi say one thing about prospects for their funds. When presenting to investors or brokers, they say the opposite, according to the charges.

The sub-prime market is "pretty damn ugly", Tannin typed into his keyboard in April 2007. He called it "toast".

"We're very comfortable with exactly where we are," Tannin said in a conference call with investors two days earlier. The fund's structure "has performed exactly the way it was designed to perform".

"I'm fearful of these markets," Cioffi wrote in March 2007, according to the indictment.

That same month, that same man, Cioffi, called the fund an "awesome opportunity" when speaking to a Bear broker who had more than 40 clients invested in it.

I'm having a deja vu. Why didn't they?

Had they never heard of Henry Blodget, ex-Internet analyst for Merrill Lynch & Co. and one-time star of CNBC? He ran into trouble for urging people to buy shares of companies while he described them in internal e-mail as "crap" and a "piece of junk".

It was in all the papers.

And then there was Jack Grubman, former telecommunications analyst for Citigroup Inc. His e-mail to his boss, Sandy Weill, suggested he would upgrade his recommendation on AT&T Corp., whose investment business Citigroup was courting, to win Weill's help in landing a spot at an exclusive Manhattan nursery school for Grubman's child.

Blodget and Grubman settled the matter civilly, both avoiding criminal charges. Not so for Frank Quattrone, former investment banker with Credit Suisse First Boston, focusing on high-tech companies. Prosecuted for obstructing justice on the basis of a single e-mail message, Quattrone shed his criminal problems only after a mistrial, a conviction, and a reversal on appeal.

"You would think that people would have learned that e-mails are sort of like Styrofoam," says Robert Mintz, former prosecutor, now white-collar defense lawyer in Newark, New Jersey. "They live on forever." True, none of the heedless e-mailers wound up in prison for their messages. Nonetheless, their stories should have served as cautionary tales.

But hey, what has caution got to do with it? We're talking hedge funds! You can't be risking hundreds of millions of dollars on shaky mortgages and then get queasy about who might later read those private little messages you send out all day long, can you?

Back in the hedge fund heyday, the managers were kings of risk, flying high on their own invincibility, indeed, on arrogance. Sort of like it was during the Internet and telecom boom, no?

And to whom are these hedge guys accountable? Isn't that the special beauty of these privately held hedge funds? No one's watching very closely.

So, no. Stupidity's probably not to blame for the e-mails exposed in this week's indictment. Perhaps these new Masters of the Universe simply never thought that they needed to be careful.

Besides, the real problem isn't what they told each other. The problem is what they told investors and brokers. If the indictment's right, they did wrong when they hid the truth, not when they revealed it to each other.

There is, of course, another explanation for their writing seemingly incriminating e-mail messages, beyond stupidity, beyond arrogance. Innocence.

It could be that these few e-mails and the snippets of conversations that the indictment reveals don't tell the whole story. Yes, the sub-prime market worried them, but upon further investigation they found reason for the optimism they passed on to investors. That's clearly what the pair's lawyers will argue.

Perhaps we will now see an e-mail that says, "I have full confidence in the sub-prime market now. That was just a false alarm. Silly me."

Or maybe their lawyers will produce a conference call in which Tannin and Cioffi warn investors about a probable downturn. Maybe the second half of that conversation with the Bear broker went something like, "but maybe you should caution your clients about risks we're seeing".

Whether they are innocent or guilty, their case offers another lesson in the dangers of e-mail. E-mail can help prove crimes. It can also be pulled out of context to give the false appearance of wrongdoing.

Either way, write your e-mail as if it could appear in an indictment. That way you can make sure it doesn't.

Ann Woolner is a Bloomberg News columnist. The opinions expressed are her own.