New York Attorney General Eliot L. Spitzer plans to retry former Bank of America Corp. broker Theodore C. Sihpol III unless Sihpol settles a suit with U.S. regulators by admitting wrongdoing about late trading and agrees to sanctions.
On June 9, a jury acquitted Sihpol of 29 charges related to helping a New Jersey hedge fund illegally trade in mutual funds after the stock market had closed. The jury deadlocked on four charges: securities fraud, scheming to defraud and two counts of falsifying business records. The judge declared a mistrial on those counts, giving Spitzer the option of retrying Sihpol or dropping the charges.
Darren Dopp, a spokesman for Spitzer, later said the attorney general is prepared to drop the charges if Sihpol, 37, is punished by settling a civil suit with the U.S. Securities and Exchange Commission.
Paul Shechtman, a lawyer for Sihpol, said Spitzer had offered to postpone the retrial for six months pending resolution of the SEC case, making no commitment to drop charges, Shechtman said. Negotiations broke down at 8:30 a.m. yesterday, Shechtman said.
The SEC lawsuit is suspended until completion of Sihpol's criminal trial, said John Nester, an SEC spokesman. The SEC won't comment on whether it is negotiating with Sihpol's lawyers to settle the suit, Nester said.
State Supreme Court Justice James A. Yates, has set a trial date of Aug. 22. If convicted on the four counts, Sihpol faces up to 16 years in prison.