Legal News

Bear Fund Managers Get Good Draw; Sizing up Judge Block

By Dan Slater

74 years-old. Hardly any experience with securities-fraud trials. A sense of humor. Treats defendants as human beings first. Keeps an electric keyboard in his chambers.

Actor Steven Seagal testifies as U.S. District Court Judge Frederic Block looks on, Feb. 11, 2003. In the Gotti trial, Seagal testified that the crew of alleged mobsters demanded that he make movies with them — or else. (Credit: AP/Jane Rosenberg)

These are some of the characteristics of EDNY judge Frederic Block, as detailed in today’s WSJ profile by Amir Efrati. Block has been assigned to the trial of former Bear fund managers Ralph Cioffi and Matthew Tannin. And lawyers familiar with Judge Block say the draw is a stroke of luck for Cioffi, 52, and Tannin, 46, whose funds collapsed last year in part because they were invested in mortgage-backed securities. Last month, Cioffi and Tannin were indicted for allegedly misleading investors about the health of their portfolio and lying about their financial interests in the funds.

Cioffi and Tannin will “get a fair shake,” says Randy Scott Zelin, a defense lawyer who recently lost a securities-fraud trial before Judge Block. “Judge Block won’t be influenced by the fact that this case is getting national attention.” He “views the people who come before him as parties, not defendants, and treats them like human beings first.” The story notes that judicial discretion could play a big role in the case, since investor losses exceeded more than $1 billion, and each charge of securities fraud — there are several — each carry a maximum 20-year sentence.

Judge Block, appointed by President Clinton in 1994, presided over the successful prosecutions of Peter Gotti, brother of the late mobster John Gotti, on racketeering charges, and other members of the Gambino crime family, as well as the retrial of Lemrick Nelson Jr., the man who stabbed an Orthodox Jew during an infamous New York City race riot. (Nelson was found guilty of violating the man’s civil rights but not guilty of causing his death.) During that racially-charged trial, Judge Block tried to bring some levity to the proceedings when he asked a black witness to define the word “chillin’, for somebody who is not a brother.”

Full post as published by Law Blog - WSJ.com on July 03, 2008 (boomark / email).