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The newly assigned judge who will determine the antitrust fate of Microsoft Corp. sold stock this year worth $45,000 to $165,000 in technology companies whose fortunes could be affected by her verdict. U.S. District Judge Colleen Kollar-Kotelly said she sold all her family’s technology holdings between Jan. 1 and Sept. 28 to avoid potential ethical conflicts. Kollar-Kotelly sold the shares in the midst of a serious slump in the technology sector — the Nasdaq composite index is down roughly 31 percent since January — but her losses would have been less if she had sold the stock early in the year. She did not specify whether she sold her shares before her appointment as the new trial judge on Aug. 24 or the amount she received. By law, she doesn’t have to report that until next year. Financial records show Kollar-Kotelly purchased stock last year in International Business Machines Corp. and Sun Microsystems Inc. — two Microsoft rivals — and owned shares of Compaq Computer Corp., which could gain unprecedented new freedom in how it can install Microsoft software on computers it sells. The judge also reported owning up to $15,000 worth of Intel Corp. shares in 1995 but never subsequently listed them among her assets or reported their sale. A court spokesman said the judge also sold her Intel shares this year as part of her overall divestiture. IBM and Sun are among Microsoft’s fiercest rivals, with significant investments in the Linux operating system that competes against Microsoft’s Windows. They also are partners in Java, a programming technology that a federal appeals court determined was the victim of an illegal Microsoft campaign to undermine its popularity. Executives or employees from all four of the companies testified before the original judge in the case, Thomas Penfield Jackson. Kollar-Kotelly, who was named to replace Jackson, did not report owning any Microsoft stock. She is to rule on penalties for Microsoft antitrust violations but has been pressing the company and government prosecutors to work out a settlement. Both U.S. law and federal ethics rules prohibit judges from ruling in cases in which they have a financial interest that could be substantially affected. In a statement, Kollar-Kotelly said she informed lawyers for Microsoft and the government on Sept. 28 about her prior ownership and the sale. Records of the judge’s holdings and trades during 2001 will not be available until May, when she will submit her next disclosure report to the Administrative Office of the U.S. Courts. Records show the judge’s holdings overall are worth between $885,000 and $2.7 million and include shares worth $60,000 to $200,000 in other technology firms, such as Cisco Systems Inc. and Qualcomm Inc., whose successes are not directly tied to Microsoft. Her statement — that neither she nor her husband “currently own any stocks in the technology sector” — indicates she sold these, too. Overall, the judge held a broad portfolio that included a rental condominium, retirement accounts, stocks and treasury bills. Ethics experts said Kollar-Kotelly’s ownership of IBM, Sun, Intel and Compaq might not have required her to abandon the Microsoft case because it was unclear how directly or substantially any decision she would make would affect those holdings. A federal appeals court in June removed Jackson, the earlier trial judge, for ethics violations it determined were “deliberate, repeated, egregious and flagrant” after Jackson discussed the pending case with reporters. “The fact that her predecessor was removed by the circuit should encourage her to be extra careful,” said Stephen Gillers, vice dean at New York University School of Law. Spokesmen for Microsoft and the government declined comment. Kollar-Kotelly purchased Compaq shares worth up to $50,000 the day after the government filed the Microsoft suit in May 1998, and sold up to $15,000 in Compaq holdings days before a senior Compaq executive testified before Jackson in early 1999. She sold the rest this year. Kollar-Kotelly also sold up to $50,000 in Sun shares in March 1998, before the trial started. She purchased some of her IBM shares, worth up to $50,000, a few weeks before Jackson entered his final judgment against Microsoft last year and ordered the company’s breakup. Records show she bought more shares in IBM months later. Kollar-Kotelly, appointed to the case in a lottery among judges, has forcefully urged the sides to settle. She appointed a mediator, Eric D. Green of Boston University’s law school, earlier this month and praised the sides for diligent negotiations but also hinted that no settlement was near. Another courtroom hearing is set Nov. 5. AP technology writer D. Ian Hopper in Washington contributed to this story. Copyright 2001 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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