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NY COURT SPLIT ON DEATH PENALTY CASE ALBANY, N.Y. — The New York court of appeals managed to preserve both the death penalty statute and the life of a condemned man in a narrow decision that bitterly split the panel and leaves unanswered all of the key constitutional issues surrounding New York’s capital punishment law. By a 4-2 margin, the court concluded Tuesday that James “Jeff” Cahill III is indeed guilty of murder, but not capital murder. It said the aggravating factors that must be present to elevate a garden-variety homicide to a capital offense were not at hand here. And it said the trial judge wrongly excluded one juror who had reservations about the death penalty and improperly included another who seemed to favor capital punishment. But two judges would have gone further and declared unconstitutional the controversial “deadlock provision,” which requires the trial court to inform jurors that if they fail to agree on either death or life without parole the court will impose a parole-eligible sentence. One judge expressed deep concerns over arbitrary application of the death penalty, and said the court cannot uphold a death sentence until it resolves a possibly unresolvable problem. Two wrote separate dissents, laced with bitterness and sarcasm, in which they accused the majority of arrogantly and unwisely intruding on matters of legislative prerogative and jury discretion. The end result of People v. Cahill, only the second death penalty case the court has heard since the statute was enacted in 1995, is that Cahill will not die for poisoning his hospitalized wife just as she showed signs of recovering from the severe beating he had inflicted six months earlier with a baseball bat. Rather, he will be re-sentenced for second-degree intentional murder, which carries a maximum sentence of 25 years to life. — The New York Law Journal THREE CHARGED IN MUTUAL FUND TRADES NEW YORK — Federal regulators Tuesday ordered the dissolution of Security Trust Co., N.A., an administrator of mutual fund trades for retirement plans. At the same time, criminal charges against three former senior executives of the company were brought by New York Attorney General Eliot Spitzer. Spitzer’s complaint, filed in New York state court in Manhattan, accuses former Chief Executive Grant Seeger, former president William Kenyon and former head of corporate services Nicole McDermott of grand larceny, falsifying business records and securities fraud under the state’s Martin Act. If convicted of the serious charges, they could face up to 25 years in prison. The officials’ actions resulted in larceny of more than $1 million, the attorney general said in a statement. At the same time, the U.S. Treasury Department’s Office of the Comptroller of Currency said it was directing the shutdown of the 12-year-old firm based in Phoenix. By order of the OCC, Security Trust will immediately begin the process of dissolving itself by March 31. The Securities and Exchange Commission has also filed related civil charges in federal court in Phoenix against the former executives and the firm. The actions are the latest developments in a widespread probe of illegal trading practices in the $7 trillion mutual fund industry. The case marks the first time regulators have addressed illegal conduct of third parties or intermediaries in mutual fund trading. It is also the first time regulators have forcefully shut the doors of a firm targeted in the probe. — The New York Law Journal MOLD CLASS ACTION RESULTS IN SETTLEMENT MIAMI — One of the nation’s largest real estate investment trusts will pay a multimillion-dollar settlement to more than 1,000 residents of an oceanfront apartment building in South Florida to end a class action mold lawsuit. The rental building’s owner, publicly traded Archstone-Smith Operating Trust, has said in filings with the Securities and Exchange Commission that total repair, settlement and related costs in the case could reach $25 million. The settlement calls for Englewood, Colo.-based Archstone-Smith to pay 100 percent of each class member’s personal property damages, 65 percent of each tenant’s rent obligation, $3,000 in “aggravation damages” for each class member who lived in the Miami-area building and 2.5 times actual expenses for certain medical conditions. Tenants of Harbour House in Bal Harbour, Fla., do not have to prove that mold caused their medical ailments. Under the deal approved Nov. 21 by Miami-Dade Circuit Judge Jeri Cohen, the company agrees to payments for every qualified class member in the suit who lived in the 452-unit, oceanfront tower between June 2002 and January 2003. It was during that period, the class members alleged, that an improperly executed renovation of the building’s heating, ventilation and air-conditioning system allowed harmful mold to spread throughout the building. — Miami Daily Business Review JUDGE WON’T DISMISS WORLDCOM CLAIMS NEW YORK — Press reports concerning widespread conflicts among Wall Street stock analysts during the booming market that ended in 2000 were not enough to put investors on notice about the allegedly “illicit relationship” between WorldCom, Salomon Smith Barney and its star telecommunications analyst Jack Grubman, a federal judge ruled Tuesday. Rejecting motions to dismiss claims in a case brought on behalf of an Ohio pension fund, Southern District Judge Denise Cote said the press reports cited by the Salomon defendants “are simply too vague to support,” as a matter of law, the conclusion that plaintiffs were on notice as to possible claims that Salomon’s financial reporting on WorldCom was tainted. The ruling was the latest in a flurry of decisions issued by Judge Cote in the largest securities fraud case in the nation’s history — one triggered by WorldCom’s multibillion-dollar balance sheet manipulation and subsequent collapse into bankruptcy. Before Judge Cote is the consolidated class action In re WorldCom, In Securities Litigation, 02 Civ. 3288, which charges that the company and former WorldCom Chief Executive Bernie Ebbers committed massive accounting fraud and violated securities laws by making false statements and filings to hide mounting financial woes. — The New York Law Journal

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