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February 10, 2006
Third time a charm?
The criminal case against former Cendant Corp. Chairman Walter Forbes has now lasted eight years. Yesterday, the second trial against Forbes on charges of securities fraud, conspiracy and two counts of lying to the Securities and Exchange Commission ended in a mistrial (NY Times article here) with the jury deadlocked after 27 days of deliberations. The first trial of Forbes in 2004 also ended in a deadlocked jury.
After running a company that merged with another to form Cendant in 1997, Forbes became Cendant's chairman and heir apparent for the CEO position. But the accounting fraud came to light in 1998 and Cendant's market cap plummeted by $14 billion in one day, which prompted the indictment against Forbes. Mounting a similar defense to that of former HealthSouth CEO Richard Scrushy, Forbes contended that subordinates betrayed him and then concealed the scheme. One of Forbes' underlings -- Cosmo Corigliano, the chief financial officer of Forbes' company that was used to form Cendant -- copped a plea on conspiracy and fraud charges and was the main government witness against Forbes during the trial.
Posted by Tom at February 10, 2006 04:33 AM
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Comments
The same jury convicted the #2 guy who is now looking at either cooperating in a 3rd trial or doing 40 years.
It must have been a nasty trial.
Moe
Posted by: Moe Levine at February 11, 2006 02:34 PM
Actually, the #2 guy is currently appealing his conviction and has been sentenced to 10 years.
But the point remains the same.
Posted by: Comment at March 1, 2006 05:01 AM
I was a juror in the 2nd trial and voted "not guilty". it was not so much a nasty trial as it was a "difficult" trial. there were gaping holes in much of the evidence against Mr. Forbes, and I believe a third trial will also bring a third mistrial.
Posted by: tom keegan at March 9, 2006 08:54 PM
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