Wednesday, January 5, 2005

Split Verdict in Cendant Prosecution

The securities fraud, mail/wire fraud, and conspiracy trial of former Cendant CEO Walter Forbes and former vice-chairman Kirk Shelton ended in a split verdict on Jan. 4: Shelton guilty on all 12 counts, and a hung jury on the charges against Forbes.  According to a New York Times story (Jan. 5),the jury deliberated for 33 days after hearing testimony for seven months.  The case involved complex accounting issues related to inflated revenues, proper accounting of expenses, etc.  Even with the length of the trial, 33 days to deliberate seems like a very long time, and it was not doubt excruciating for all involved.  No word yet from the U.S. Attorney's Office in New Jersey whether it will seek to retry Forbes, but given his high position in the company, the company's settlement of shareholder lawsuits for $2.85 billion--the largest payment ever from a fraud case--and the possibility that Shelton might cooperate with the government in a retrial, it is more likely that there will be a second trial absent a plea bargain. (ph)

Fraud, Prosecutions, Securities | Permalink

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