GAF Loses Bid to Have Fraud Counts Dropped

GAF Corp. and its vice chairman suffered a setback today in their attempt to have stock-manipulation charges against them dismissed following a mistrial ruling by the trial judge.

A two-judge panel from the U.S. 2nd Circuit Court of Appeals denied their request for a stay that would halt the selection of a new jury scheduled to begin Tuesday.

Although the ruling was solely on the stay request, statements made by the judges indicated that they would likely refuse a full appeal to dismiss the charges.

GAF had no immediate comment on the ruling.

GAF and Vice Chairman James Sherwin are charged with stock-manipulation for allegedly trying to boost the price of Union Carbide Corp. shares.

The government alleges that GAF wanted to raise the price of Carbide shares because it was holding a large stake after failing to take over the chemicals company.

The defense lawyers have been trying to get the case thrown out because the government failed to tell them about an expert report that showed a key piece of evidence had been altered, a violation of procedural rules.

Although a mistrial was granted by the trial judge, U.S. District Judge Mary Johnson Lowe, the charges were not dismissed.

The defendants had argued that beginning a new trial would amount to double jeopardy, or the trying of a person for the same crime twice.

The appeals court judges found that the defendants had not met the legal requirements for the charges to be dismissed.