Eliot Spitzer Loses a Round

After a five-week high profile trial, a jury has returned a verdict of "not guilty" against former Bank of America Corp. broker Theodore Sihpol ... The Wall Street Journal reports (subscription only):

Former Bank of America Corp. broker Theodore Sihpol was found not guilty of improperly trading mutual funds, in the first real courtroom test of New York Attorney General Eliot Spitzer's campaign against financial fraud.

.... The acquittal is a high-profile setback for Mr. Spitzer, who has made a name for himself while largely avoiding the courtroom. He has extracted multimillion-dollar settlements from corporate defendants, forced executives to resign and launched sweeping changes of practices on Wall Street and in the mutual-fund and insurance industries. Buoyed by his victories and the cheers of supporters, Mr. Spitzer has announced plans to run for governor in 2006.

But critics have complained that he uses tough and headline-grabbing tactics to damage businesses, charges he vigorously disputes. In the Sihpol case, some observers questioned whether Mr. Spitzer should have given key witnesses in the trial immunity from prosecution, a move that clearly troubled some jurors.

The actual verdict was:

....not guilty of 29 counts of larceny, falsifying business records and other crimes. Justice James A. Yates declared a mistrial on four counts after the jury said it was unable to reach a unanimous conclusion.

Another blow for purchased testimony - testimony bought with promises of leniency or freedom, commodities that are far more precsious than money.

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    Re: Eliot Spitzer Loses a Round (none / 0) (#1)
    by Talkleft Visitor on Sat Dec 17, 2005 at 12:59:54 PM EST
    It's a pity that we need a Spitzer to try to rein in abuses on Wall Street. While many of the charges are manufactured to make up for the fact that much of the underlying conduct is not exactly illegal (mutual fund market-timing), one would like to imagine that this spate of charges and prosecutions will prompt the mutual fund industry to clean up its act and provide a level playing field for its investors. But considering the surge in interest in hedge funds among small investors, it seems that rather than wanting the abusers punished, many investors who may actually have been harmed by the favoritism shown to the hedge funds, actually want to join them...