May 8, 2017 / 10:35 PM / 3 years ago

Split verdict for Dewey & LeBoeuf executives in second trial

NEW YORK (Reuters) - A Manhattan jury on Monday convicted a former top executive of the now-defunct U.S. law firm Dewey & LeBoeuf of defrauding investors while acquitting another executive, roughly 19 months after an earlier trial ended with a hung jury.

Joel Sanders, former CFO for law firm Dewey and Leboeuf, exits the courtroom at Manhattan Criminal Court in New York, September 16, 2015. REUTERS/Brendan McDermid

The former CFO, Joel Sanders, was convicted in Manhattan state court of securities fraud and conspiracy charges. The firm’s former executive director, Stephen DiCarmine, was acquitted of the same charges.

Manhattan District Attorney Cyrus Vance said that with Sanders’ conviction, “a top executive has been held accountable.”

Sanders’ lawyer, Andrew Frisch, said he expected to get the conviction overturned on appeal.

Sanders is scheduled to be sentenced on Oct. 6, according to Vance’s office.

Dewey & LeBoeuf, which once had close to 1,400 lawyers, went bankrupt in May 2012, unable to pay for the lavish compensation packages it had promised to recruit star partners. The collapse was the largest of any law firm in U.S. history.

The criminal case against its executives, which originally also included former chairman Steven Davis, was one of the most significant white-collar prosecutions brought by Vance since he took office in 2010.

Prosecutors claimed the executives used illegal accounting adjustments between 2008 and 2012 to conceal the firm’s financial difficulties from investors in its bonds, including Bank of America Corp and HSBC Holdings Plc.

Seven lower-level employees pleaded guilty to criminal charges in connection with Vance’s investigation.

The first trial for the three executives ended in October 2015 when jurors, after four months of testimony and a month of deliberations, declared themselves hopelessly deadlocked on most counts.

After that trial, Justice Robert Stolz dismissed the most serious charge, grand larceny. Davis struck a deal with prosecutors to avoid a second trial, agreeing to a five-year ban from practicing law in New York.

The second trial for Sanders and DiCarmine began in February.

Joan Vollero, a spokeswoman for Vance’s office, said the office was disappointed with the acquittal of DiCarmine but respected the jury’s decision.

DiCarmine’s lawyer, Rita Glavin, said he was “an innocent man from the beginning.”

“It’s a case that never should have been brought and we are grateful to the jury for recognizing that there is no merit to the charges,” she said.

The firm was created in 2007 with the merger of two established firms - Dewey Ballantine, which was founded in 1909, and LeBoeuf, Lamb, Greene & MacRae, which started in 1929.

Reporting By Brendan Pierson in New York; Editing by Bill Trott

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