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In yet another blow to the government, jurors last week acquitted two of three executives at America Online Inc. and PurchasePro.com who were accused of cooking the books in 2001. The 11 jurors in the U.S. District Court for the District of Columbia took a little over a day to absolve ex-AOL attorney Kent Wakeford and Michael Kennedy, a former chief technology officer at PurchasePro, of securities fraud violations after a six-week trial before Senior Judge Gladys Kessler. Another former PurchasePro executive, Christopher Benyo, was found liable on one count of violating securities laws for backdating a $3.7 million transaction in 2001. The Securities and Exchange Commission pursued the civil case against the defendants despite acquittals on criminal charges last year against three of the defendants in the Eastern District of Virginia. A fourth defendant — ex-AOL executive John Tuli — will be tried in July. Benyo and others were accused of backdating the contract in order to deceive investors and auditors. Kessler must now decide whether to assess fines and if Benyo should be permanently barred from holding office in a publicly held company. Henry “Hank” Asbill, a Dewey & LeBoeuf partner who represented Wakeford, says his client “was wrongly accused.” David Schertler, one of the attorneys for Kennedy at Schertler & Onorato, says: “This is a wonderful vindication for Michael Kennedy in a case that never should have been brought against him by the SEC.” SEC lawyer David Gottesman says he is pleased with Benyo’s verdict, but the agency is weighing its appeal options.
Pedro Ruz Gutierrez can be contacted at [email protected].

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