More securities fraud convictions have been thrown out in the federal government’s long-running prosecution of alleged improper trading among specialist firms at the New York Stock Exchange, according to published reports.
U.S. District Judge Sidney Stein yesterday vacated the May 2006 guilty pleas of Patrick McGagh and Joseph Bongiorno, both former traders at Brooklyn-based Van der Moolen Specialists USA LLC.
In a separate ruling, prosecutors also dropped criminal charges against Freddy DeBoer, a former trader at New York-based LaBranche & Co. Inc.
Yesterday’s rulings were the latest defeat for prosecutors who had brought criminal charges against 15 New York Stock Exchange specialist traders for allegedly making illegal trades in 2005.
In late July, the 2nd U.S. Circuit Court of Appeals in New York overturned securities fraud convictions against former Van der Moolen supervisors Michael Hayward and Michael Stern, calling evidence against the men "insufficient to prove deception” (InvestmentNews, July 31).
A spokeswoman for the U.S attorney’s office in Manhattan, which brought the cases, had no comment on any of the rulings.
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