Nation : Mistrial Declared in GAF Case

A federal judge declared a mistrial today in the stock manipulation case against chemical company GAF Corp. and one of its key officers, deciding that the government’s failure to disclose possible tampering with a key piece of evidence unfairly hurt the defendants.

The ruling by U.S. District Judge Mary J. Lowe stunned a packed courtroom, but the judge said she intended to start picking a new jury Wednesday morning for a new trial. She denied an immediate defense motion to have all the charges dismissed.

The stock manipulation case against GAF and Vice Chairman James T. Sherwin is one of the major ones arising out of the Ivan Boesky insider trading scandal. It was considered a major test of the government’s ability to successfully prosecute Wall Street trading abuses. The government’s case relied partly on an invoice sent to GAF by Jefferies & Co., a Los Angeles brokerage that conducted stock trades for the company.