JURIST - Paper Chase: Saturday, July 19, 2008

[JURIST] The US Court of Appeals for the Second Circuit [official website] on Friday upheld [opinion, PDF] the acquittal of David Finnerty, a former specialist trader at Fleet Specialist Inc., a subsidiary of FleetBoston Financial Corp., who had been accused of making improper trades for his firm’s account on the New York Stock Exchange (NYSE) [official website]. The three-judge panel unanimously decided that while Finnerty broke NYSE rules, prosecutors failed to prove that his conduct was deceptive, an essential element of the crime:

Th[e] evidence shows that Finnerty knew he had violated an NYSE rule, and tried to cover it up. But violation of an NYSE rule does not establish securities fraud in the civil context, let alone in a criminal prosecution... Finnerty may have known that interpositioning was wrong within the context of his employment, and that it put him at risk professionally, but an awareness of peril, a guilty conscience or an impulse to cover one’s tracks does not bespeak criminally fraudulent conduct within the context of the securities laws.

In 2005, Finnerty and 14 other brokers were indicted on charges of “interpositioning,” a process in which brokers step in front of their customers to intercept trades at more favorable prices. A jury found Finnerty guilty of three counts of securities fraud in October 2006. That judgment was reversed [opinion, PDF] in February 2007 by US District Judge Denny Chin, who held that the government had not proven the defendant’s conduct defrauded customers. Prosecutors suspect that Finnerty’s conduct resulted in illegal profits of approximately $4.5 million. CNN has more.

Bank of America [CBS News report on merger] has since acquired FleetBoston Financial Corp. and has been subject to litigation based on events which allegedly occurred prior to the merger. One class action lawsuit was brought seeking recovery for damages caused by the alleged "timing" [Stanford Law backgrounder] of mutual fund trades so as to benefit preferred clients at the expense of other investors. A previous action alleged fraudulent conduct in the description of credit card fees [Legal Intelligencer report].

[JURIST] The Arab League [official website, in Arabic] issued a resolution on Saturday criticizing International Criminal Court (ICC) Chief Prosecutor Luis Moreno-Ocampo [official profile] for seeking the arrest of Sudanese President Omar al-Bashir [BBC profile, JURIST news archive] for genocide, crimes against humanity, and war crimes. The 22-country group, which held an emergency meeting on Saturday to discuss the pending charges, rebuked the prosecutor for his “unbalanced stance” and said that an indictment – the first ever against a sitting head of state – would set a dangerous and destabilizing precedent. The resolution stated:

The council decides solidarity with the Republic of Sudan in confronting schemes that undermine its sovereignty, unity and stability and their non-acceptance of the unbalanced, not objective position of the prosecutor general of the Internal Criminal Court.

Arab League officials recommended that domestic trials be used in lieu of ICC prosecutions, vowing that “effective justice will be realized with the follow-up of the Arab League and the African Union.” AFP has more.

Prosecutor Moreno-Ocampo applied for an arrest warrant [application, PDF; JURIST report] last Monday for President al-Bashir for atrocities committed in the Darfur region of Sudan. The application, which followed a three-year investigation involving more than 100 witnesses in 18 countries, began with the referral of the situation to the Office of the Chief Prosecutor in 2005 [JURIST report]. This past June, Prosecutor Moreno-Ocampo stated before the UN Security Council [official website] in June that “evidence shows that the commission of such crimes on such a scale, over a period of five years, and throughout Darfur, has required the sustained mobilization of the entire Sudanese state apparatus.” The Security Council has repeatedly called on Sudan to comply with the ICC investigation [JURIST report], but Sudan has refused to do so, calling Moreno-Ocampo a "terrorist" [JURIST report] and suggesting that he should be removed from office.

[JURIST] The Malawi [government website; BBC country profile] state security organization has put under surveillance the three-judge panel determining whether former President Bakili Muluzi [BBC profile] is eligible to run for another term as president, according to a Friday report by the Nyasa Times. The report included a statement from an officer with the Secret Intelligence Service (SIS), a branch of the Malawi Police Service (MPS) [official profile], who said the surveillance was normal and that it included monitoring bank accounts as well as tapping their phone lines. The legal action [Nation Online report] was brought before the Constitutional Court [VOA report] by a member of Muluzi's United Democratic Front Party (UDF), James Phiri, who is arguing that Malawi's Constitution [PDF text] does not allow a person to run for president if they have served for two consecutive terms. The court is set to decide the issue on July 25.

Muluzi defeated president-for-life Kamuzu Banda in the country's first democratic election in 1994. He then served as President of the nation until 2004, when he failed in an attempt to amend the country's constitution to allow him to serve for a third term. He was able to turn over power to his hand-picked successor, President Bingu wa Mutharika [BBC News profile], but Murtharika later defected from Muluzi's United Democratic Front party and formed his own party, the Democratic Progressive Party (DPP) [official website]. The two leaders have been involved in a number of legal troubles within the country in recent years, including corruption charges [JURIST report] which were later dropped [JURIST report] against Muluzi in July 2006, the arrest of Malawi Vice President Cassim Chilumpha [official profile] on charges of treason for allegedly attempting to assassinate the President in April 2006, and impeachment proceedings [JURIST report] against the President in 2005 based on allegations that he misused public funds and abused his presidential role.

[JURIST] The US Court of Appeals for the Ninth Circuit [official website] made an unusual ruling [opinion text, PDF] on Friday, finding that the adverse credibility determination made by an Immigration Judge (IJ) in an asylum case was not based on substantial evidence. The petitioner, Etagegn Haile Tekle, appealed the Board of Immigration Appeals (BIA) [DOJ backgrounder] decision which had affirmed the IJ's denial of her case for asylum, and the Ninth Circuit granted her petition for review. Etagegn is a citizen of Ethiopia [JURIST news archive] who applied for asylum to the US in 2004 because of a fear of arrest and torture due to her membership in the Oromo Liberation Front (OLF) [advocacy website], a political organization seeking independence for the Oromo ethnic group. The IJ had also found that even if her testimony were truthful, she is ineligible for asylum because she has “not demonstrated severe past persecution,” and her fear of harm is due merely to “general conditions of violence and civil unrest” in Ethiopia. In its opinion, the Ninth Circuit Court made a special effort to refute the assertions in the following statement made by the IJ on the record:

I have one other comment, and again, I don’t care if the 9th Circuit wants to report this to my supervisor. The 9th Circuit does not comply with Supreme Court law with regard to asylum. While I am in the 9th Circuit and have to comply, I do note that they don’t really care what Immigration [J]udges do. If an Immigration [J]udge makes an adverse credibility determination, they will, in only one case out of every 250 to 300, affirm it. So I don’t play their game with regard to credibility determinations. [sic]

The case was remanded to the BIA for additional proceedings, including a determination as to the availability of relief under the Convention against Torture [text].

Ethiopian human rights practices have been strongly criticized lately. Last month a report [text, PDF; JURIST report ] from Human Rights Watch (HRW) [advocacy website] detailed atrocities committed by both the Ethiopian military and the ethnic Somali group the Ogaden National Liberation Front (ONLF) [official website], who are seeking independence for the Ogaden region. In October 2007, the US House of Representatives passed the Ethiopia Democracy and Accountability Act of 2007 (H.R. 2003) [text; JURIST Forum article], aimed in part at encouraging the human rights situation in Ethiopia, and the bill awaits a Senate vote. In July 2007, HRW accused Ethiopian troops of violating international humanitarian law [JURIST report] by burning homes and forcibly relocating civilians in Ogaden. In March 2007, HRW also accused Ethiopia of complicity with the US and Kenya in secretly detaining Somalis [JURIST report] accused of being Islamic militants. Ethiopia had admitted [JURIST report] in April 2007 that it detained terror suspects but denied that the detentions were secret.