Cendant Corporation’s former vice chairman, E. Kirk Shelton, was convicted of directing an accounting fraud that led to the largest shareholder settlement in American history and foreshadowed an era of corporate scandals. The case against Cendant’s ex-chairman, Walter Forbes, ended in a mistrial.

Jurors in Hartford, Conn., found Shelton guilty on 12 counts, including conspiracy, mail fraud, wire fraud, and securities fraud. The jury could not reach a verdict on 16 counts against Mr. Forbes after weighing the charges for 33 days.

“At this time, I declare a mistrial” in Mr. Forbes’s case, District Judge Alvin Thompson said after dismissing the jury of 10 men and two women and thanking them for their service.

The two executives were accused of overstating $286 million in earnings at CUC International, which merged in 1997 with HFS Incorporated to form Cendant. Shares of Cendant, the biggest American travel and real-estate services company, plunged $14 billion when the company disclosed accounting irregularities on April 15, 1998.

The fraud forced Cendant to restate $571 million of CUC income and pay $3.2 billion in cash and stock to resolve investor lawsuits. The CUC fraud preceded the collapse of Enron and led to charges that later became common: manipulation of profit to inflate stock prices and enrich executives.

Shelton, 49, faces as much as 40 years in prison. Mr. Thompson set March 24 as the sentencing date. Shelton remains free on a $1 million bond.

After Mr. Thompson’s courtroom deputy read the verdict, Shelton buried his face in his right hand. When the jury was dismissed, he embraced his wife, Amy, who wept.

Shelton and Mr. Forbes declined to comment after the trial, as did their lawyers.

Michael Drewniak, a spokesman for U.S. Attorney Christopher Christie in Newark, N.J. – whose office brought the case – declined to say if prosecutors will pursue charges against Mr. Forbes again.

CUC, which enrolled home shoppers, travelers, and restaurant patrons in buying clubs, merged with HFS, a franchiser of hotels, rental-car agencies, and real estate brokerages. Prosecutors said the fraud grew before the HFS merger as CUC struggled to meet the expectations of Wall Street analysts.

New York-based Cendant, whose brands include Days Inn hotels, Avis rental cars, and Century 21 real estate brokerages, settled shareholder lawsuits over the fraud in 2000.

Both Shelton and Mr. Forbes said they had no knowledge of the phony accounting and blamed Cosmo Corigliano, CUC’s former finance chief, who pleaded guilty and testified for 18 days as a government witness. Mr. Forbes and Shelton also said they relied on CUC’s accountants and auditors at Ernst & Young LLP for accurate financial statements.

Prosecutors said the two executives conspired with seven CUC executives on the improper use of merger reserves and other accounting manipulations. Mr. Forbes and Shelton enriched themselves as the fraud boosted CUC’s share price from $2 in 1990 to more than $40 in early 1998, prosecutors said.