Mistrial Declared in Mulheren Trial; Conviction Stands

A federal judge Thursday declared a mistrial on the remaining 26 securities fraud counts against stock speculator John A. Mulheren Jr., who is accused of breaking laws to benefit Ivan F. Boesky in exchange for inside tips.

On Tuesday Mulheren was convicted of four charges that he manipulated the price of Gulf & Western stock for Boesky’s benefit. That conviction will stand. Gulf & Western is now Paramount Communications Inc.

At that time, the jury indicated it was deadlocked on the remaining 26 counts of the indictment and was ordered by U.S. District Judge Miriam Cedarbaum to continue deliberations. She declared the mistrial Thursday when jurors still could not reach a decision.

“We’re gratified most of the government’s case was not proved,” said Thomas Puccio, Mulheren’s lawyer. He said his client would appeal the conviction on the four counts.

“I don’t think there is a basis in law for the verdict. I think that verdict was not supported by the evidence,” Puccio said.

Although Mulheren faces a maximum sentence of 20 years in prison and $1 million in fines, he was obviously relieved by the mistrial on the remaining counts.

A spokeswoman for the U.S. Attorney’s office said the prosecutors had no comment on whether they would retry the case based on the 26 counts.

The jury began deliberating June 29 after a seven-week trial.

Mulheren, who was wearing jeans and an orange and blue athletic jacket, went up to the prosecution table after the mistrial was declared and began joking with the government lawyers.

Asked for his reaction, Mulheren said, “I have no reaction. Nothing happened. I was amazed by counts one through four. It seemed pretty wild to me.”

He is scheduled to be sentenced Oct. 5.

Mulheren, 40, is formerly head of the now-defunct investment firm of Jamie Securities.

The case against Mulheren stemmed from several schemes in which he allegedly helped one-time Wall Street powerhouse Boesky cheat on his income taxes, manipulate stock prices and avoid rules on how much money he needed to have on hand to cover losses.