07/31/2008
Cooley Client Fully Vindicated in New York White Collar Appellate Victory
Charges Against Client in NYSE-Related Case Overturned
New York, NY – July 31, 2008 – Cooley Godward Kronish announced today a major appellate victory on behalf of client Michael Hayward, a New York Stock Exchange floor specialist who was accused of defrauding New York Stock Exchange customers. On July 30, Hayward’s remaining securities fraud conviction for allegedly trading stocks on his firm's account before filling clients' orders was overturned by the second circuit Court of Appeals.
The appeal was the final step in the ongoing prosecution of 15 New York Stock Exchange specialists who had been accused of securities fraud. In July 2006, Hayward, who was defended by Cooley partner and seasoned white collar criminal defense attorney Jonathan Bach, was acquitted of the most serious charges against him following a three-week jury trial in the Southern District of New York. After deliberating four days, the jury did find Hayward guilty on one count of fraud for which the court in turn sentenced him to six months in prison. Earlier this week, the Court of Appeals overturned the fraud conviction thereby fully exonerating Hayward.
“Michael Hayward is very happy to have been vindicated,” said Bach, based in Cooley’s New York office. “The government's case had clear problems from the start - other similar cases were dropped, and numerous verdicts of acquittal were returned. Now an appellate court has determined the entire legal theory underlying these cases was wrong."
Hayward and his co-defendant Michael Stern were the first specialists to face trial based on widespread accusations of specialist misconduct. The second circuit's decision brings to an end all of the criminal proceedings pending against former floor specialists at five of the Big Board's seven specialist firms.
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