CHICAGO, JULY 9 -- A federal jury today convicted two commodities traders on fraud charges but acquitted a third and failed to reach a verdict on dozens of other counts in the first trial based on an FBI probe at the world's largest futures exchanges.
U.S. District Judge Ann C. Williams declared a mistrial on charges including a racketeering count against one of the defendants. The jury deliberated 11 days before announcing it could not reach a decision on all the charges.
Robert D. Mosky, 34, a Chicago Mercantile Exchange floor broker portrayed by prosecutors as the leader of a fraud scheme in the Merc's Swiss franc futures pit, was found guilty on five fraud counts and two counts of violating trading rules.
But the jury was unable to reach a verdict on a racketeering count against Mosky or on 74 other counts he faced of fraud and trading violations.
Independent trader Danny L. Scheck, 28, was convicted of one count of aiding and abetting fraud. The jury could not reach a verdict on 20 other counts against Scheck.
David Zatz, 43, another independent trader in the Swiss franc pit, was acquitted of one count of mail fraud and one count of aiding and abetting fraud. The jury was unable to reach a verdict on 12 other counts against Zatz.
Federal prosecutors quickly left the courtroom after the verdict. U.S. Attorney Ira Raphaelson, asked what effect the verdict would have on the trials of other traders indicted in the FBI sting, said: ''It doesn't mean anything.''
Assistant U.S. Attorney Mark Pollack said the government plans to retry the three traders on the counts on which the jury could not reach a verdict, subject to a review of the case.
Mosky's lawyer, Elliott Samuels, had argued during the trial that the prosecution represented an ''overzealous'' and ''outrageous'' government attempt to enforce vague trading regulations.
''I'd like to think the jury was disturbed about the government's theory,'' Samuels said, adding: ' "I admit it could have been worse.''
The Chicago Merc's board of governors will discuss Wednesday what action, if any, to take against the convicted traders, Merc spokesman Andrew Yemma said.
The Swiss franc traders were the first to stand trial on charges stemming from a continuing FBI probe of corruption at the Merc and the Chicago Board of Trade, the world's biggest commodity markets.
In all, 48 people have been indicted since August. Sixteen have pleaded guilty to reduced charges, including two Swiss franc traders who testified against Mosky, Scheck and Zatz. Trials are scheduled in September for 15 traders from the Merc's Japanese yen futures pit and 13 soybean futures traders from the Board of Trade.
In the trial, which began May 8, the government contended the defendants conspired to cheat customers by changing the prices at which customer orders were executed or through prearranged and off-market trades that prevented the orders from being offered in the open, competitive market.
A futures contract is an agreement to buy or sell a commodity -- in this case a quantity of Swiss francs -- at a price agreed upon in advance.
Prosecutors said Mosky used the stolen customer profits -- which were sometimes as small as $12.50 per trade -- to pad his own account and to repay Scheck and Zatz for illegally accepting the financial liability for his trading errors.
Assistant U.S. Attorney James Fleissner told jurors the alleged fraud scheme was ''the perfect scam.''
Defense lawyers argued their clients had done no wrong. They contended the government's star witness, undercover FBI agent Randall Jannett, was so ill-prepared for his role as a trader that in the seeming chaos of the trading pit he mistook the defendants' legitimate actions for improprieties.