Sullivan & Worcester Convince Federal Prosecutors in Manhattan to Drop Fraud Case

October 6, 2006

See New York Times Article (Also covered by Wall Street Journal, Reuters, Dow Jones Wire, Securities 360)

Sullivan & Worcester succeeded in getting federal prosecutors in Manhattan to drop their fraud case against Donald R. Foley II a former specialist at Fleet Specialist Inc., saying it would "not be in the interests of justice" to continue the prosecution, according to court documents filed on October 6th.

Donald R. Foley II, facing two counts of securities fraud, was represented by a team of Sullivan & Worcester attorneys, led by Franklin B. Velie and including Adam B. Oppenheim, George O. Richardson, Jonathan G. Kortmansky, Kimberley R. Chapman and Gretchen Silver.

Prosecutors had accused Foley of making trades that were improperly positioned between buyers and sellers in order to make illicit profits for the firm and jumping ahead of customer orders between January 1999 and April 2003. Improperly positioning oneself between orders instead of matching those buy and sell orders is known as "interpositioning."

Specialists match buyers and sellers at the NYSE, a unit of the publicly traded NYSE Group Inc. (NYX), and provide liquidity by buying or selling shares when there is an imbalance on the floor.

"We're, of course, thrilled with the outcome," said Franklin B. Velie, a partner in Sullivan & Worcester's New York Office. "My feeling was they had indicted an innocent man and we were determined to do everything we could to make sure his name was cleared."