All Six Charged in Squawk-Box Case Made Deals, U.S. Says
By Christie Smythe - Mar 28, 2013 11:26 AM ET
Six men charged in a scheme to tip off traders to internal brokerage “squawk box” data reached deferred-prosecution agreements, the government said.
Assistant U.S. Attorney James McMahon announced the deals today in Brooklyn, New York federal court, marking the end of a case that began more than seven years ago.
Former brokers at Merrill Lynch & Co., Citigroup Inc. (C) and Lehman Brothers Holdings Inc. were accused of selling information on securities orders broadcast on internal communication systems to employees at A.B. Watley Group Inc.
“The government should have dismissed the case,” said Andrew J. Frisch, a lawyer for one of the defendants, ex-Merrill Lynch broker Kenneth Mahaffy Jr. “It should never have been brought in the first place. He can’t get his 7 1/2 years back.”
In August, a federal appeals court in Manhattan reversed the convictions of all six, ruling that prosecutors had withheld critical evidence.
The men were convicted in 2009 of conspiracy after their first trial ended in hung jury on that count. The first trial, in 2007, resulted in an acquittals on another 38 counts.
The case is U.S. v. Mahaffy, 1:05-cr-00613, U.S. District Court, Eastern District of New York(Brooklyn).
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