Newsday (Suffolk Edition) from Melville, New York • 39

MfiKBriefingNM A39 The markets 10-DAY DOW TREND Former broker's larceny fraud trial puts spotlight on probes by New York's attorney general SIhpol case going to jury MWlllwe wwwncws4jyconi NEWSDAY WEDNESDAY JUNE 12005 WTFMTWTFMT IWM0 RPV BBIM WIOnBi DOW NASDAQ 1046748 206822 Down 7507 Down 751 SAP 500 BOND YIELDS 119150 KJ-ysvr Treasury Down 728 407 unchanged YGOU) $41690 A OH $5197 Down $290 Up $012 Stock watch US Xprcss Enterprises XPRSA: $1221 Up $121 (11) The trucking company said it agreed to sell its airport-to-airport business to Forward Air Corp for $1275 million DreamWorks Animation SKG DWA: $2940 Down $295 (91) The company's latest film missed opening weekend box-office sales estimates from at least two analysts Overheard "The NHL knows where we stand and not going to depart from our Mark Shapiro ESPN's executive vice president of programming and productioti yesterday when ESPN said has stopped negotiations with the National Hockey League and that the sport isn't worth half of the $60 million rights fee the Waft Disney Co cable network agreed to pay last season even if a new labor contract is reached and play resumes in October Data point Percentage of auto parts suppliers who said in a survey they prefer not to work with General Motors Coming up Tomorrow the government reports on first time claims for unemployment insurance Compiled from wire reports the prosecution is expected to present his closing argument to the jury this morning Besides fate a number of other issues are at stake in the triaL John Coffee a securities law professor at Columbia University said it "would be a very major crisis for the Securities and Exchange Commission" if the jury were to acquit Sihpol because it believed he wasn't violating any rule Coffee said that although there is an "absolute cutoff" cm trading at 4 pm a Sihpol acquittal citing doubt about foe rule would spark a major SEC effort to make it more clear Although a not guilty verdict for Sihpol be a happy day" for Spitzer "I think this case is make-or-break for him" Coffee said But an attorney who didn't want to be identified said Spitzer has pursued "some very novel theories" in his prosecutions of the financial industry and if he loses the case "it would make people third: twice about settling" The attorney requested anonymity because he said he represents clients in similar cases One other mutual fond case is scheduled for trial this fall Moreover Spitzer may file criminal charges against top officials of American International Group in a spreading insurance industry scandal and he is preparing to try former New York Stock Exchange chairman Richard Grasso next year over the size of his compensation package for violating state law governing not-for-profit entities Adding another bit of freight to the jury's deliberations a state judge recently ruled in a separate case that if Sihpol is convicted of criminal charges Bank of securities unit could possibly be thrown out of its Manhattan headquarters Solow Building Co II which rented the unit its space at 9 57th St is trying to evict it partly over a disagreement over alterations to the property and electricity charges But it also claims that under laws that were enacted to toss out drug dealers and prostitutes from apartments it could evict the bank on grounds that multiple felony charges and securities law violations violate the lease's terms Tara Burke a bank spokeswoman said yesterday that "we believe the charges are totally without merit and expect to be successful in the litigation in due course" Solow Building couldn't be reached for BY SUSAN HARRIGAN STAFF WRITER Compared with some of the high-profile analysts fund managers and insurance executives whoVe been caught up in New York Attorney General Eliot probes of the financial industry Theodore Sihpol III isn't a well-known name But his trial which is expected to go to the jury today has received a lot of attention Sihpol a 37-year-old former Bank of America broker is the first person to go to trial as die result of highly publicized investigations which led to industry reforms and brought Spitzer national notoriety and a shot at becoming New next governor Sihpol is charged with larceny securities and falsifying business records in connection with late trading of mutual funds by a hedge fund between 2001 and 2003 and faces up to 30 years in prison if convicted During the nearly four-week trial in New York State Supreme Court in Manhattan Sih-pol's lawyers have argued that he had no intent to commit a crime and that he and others involved in buying and selling shares of mutual funds for the hedge fund Canary Capital Partners after US markets dosed at 4 pm believed the practice was legal They submitted an affidavit from a Yale Law School professor saying that trading after 4 pm isn't illegal although they didn't call that person or any other witnesses during the triaL In his closing argument yesterday Sihpol lawyer Paul Shechtman also reiterated contentions that many higher-ups knew about the late trading and that Sihpol made no attempt to hide it one man on trial is Ted Sihpol a then-32-year-old cold caller" who placed an unsolicited call to Edward Stem seeking Canary's business Shechtman said The other participants avoided a triaL Stem the manager of Canary Capital paid $40 million to settle charges without admitting wrongdoing and Bank of America ami FleetBoston Financial reached a $675-million settlement with regulators Quoting the late US Supreme Court Justice Byron White Shechtman said that purpose of foe jury is to make available the common-sense judgment of the community as protection against a mis-takni prosecutor" Harold Wilson the assistant attorney general leading Theodore Sihpol III outside court last month Time line of the case Sept 3 2003i Attorney general Eliot Spitzer launching an investigation of the mutual fund industry says prominent mutual funds including Bank of Funds helped hedge fund Canary Capital Partners place trades after markets had closed Canary settles for $40 million without admitting wrongdoing Its manager Edward Stern is cooperating with Spitzer Sapt 16t 2002 Spitzer charges Theodore Sihpol III former broker for Bank of America with criminal securities fraud and larceny for allegedly setting up an arrangement that gave Canary access to prices not available to all investors 1 15 2004: Bank of America and FleetBoston Financial Corp which Bank of America acquired last year settle with Spitzer and federal regulators for $675 million April 21 2004: Sihpol pleads not guilty May 2 2005: Trial begins state Supreme Court Manhattan May 13 2005: Prosecution witness Edward Stern testifies he never felt "entirely comfortable" with late trading but didn't express that concern to SihpoL May 2005: A New York civil court judge says Bank of America Securities could be evicted from its Manhattan headquarters if Sihpol is convicted of criminal charges May 23 2005: The prosecution rests its case May 25 2005: The defense rests without calling witnesses.