Spitzer To Retry Ex-Broker Sihpol On Four Counts
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New York Attorney General Eliot Spitzer plans to retry ex-Bank of America broker Theodore Sihpol III unless Mr. Sihpol settles a suit with federal regulators by admitting wrongdoing about late trading and agrees to sanctions.
Mr. Spitzer arranged a new trial date of August 22 yesterday. Mr. Spitzer spokesman Darren Dopp later said the attorney general is prepared to drop the charges if Mr. Sihpol, 37, is alternatively punished by settling a civil suit with the SEC.
The decision to retry “is surprising,” said Tom Curran, a former New York prosecutor now with the law firm of Edwards & Angell in New York. “It costs money to try these cases. They obviously believe in their case.”
On June 9, a jury acquitted Mr. Sihpol of 29 charges related to late trading of mutual fund shares. The jury, favoring acquittal 11-1, deadlocked on four charges: securities fraud, scheming to defraud, and two counts of falsifying business records. The judge declared a mistrial on the four counts, giving Mr. Spitzer the option of retrying Mr. Sihpol or dropping the charges.
Assistant Attorney General Harold Wilson told State Supreme Court Justice James Yates of Mr. Spitzer’s decision to retry at a hearing in New York.
Paul Shechtman, a Sihpol lawyer, said Mr. Spitzer hadn’t made the offer to drop charges to his client. Mr. Spitzer had offered to postpone the retrial for six months pending resolution of the SEC case, making no commitment to drop charges, Mr. Shechtman said. Negotiations on the matter broke down at 8:30 a.m. yesterday, Mr. Shechtman said. Mr. Sihpol wasn’t willing to postpone the retrial “because he needs to get on with his life,” Mr. Shechtman said.
The SEC lawsuit is suspended until completion of Mr. Sihpol’s criminal trial, said agency spokesman John Nester. The SEC won’t comment on whether it is negotiating with Mr. Sihpol’s lawyers to settle the suit, Mr. Nester said.
Mr. Sihpol was acquitted of charges related to helping a New Jersey hedge fund illegally trade in mutual funds after the stock market had closed.
Judge Yates told the lawyers that because the scheme-to-defraud charge is among the four surviving counts, “the scope of the trial may be the same” as the first one.
