Judge Bars Some Evidence in Keating Trial

Jurors in the criminal securities fraud trial of Charles H. Keating Jr. might not get to hear some of the most inflammatory evidence against the former owner of Lincoln Savings & Loan.

Los Angeles Superior Court Judge Lance A. Ito issued tentative rulings Tuesday that would forbid or limit presentations to jurors of such information as a federal judge’s opinion last year that actions by Keating and his top executives “amounted to a looting of Lincoln.”

Ito termed much of the contested evidence irrelevant or redundant, though prosecutors might be allowed limited use of the evidence under certain circumstances.

One contested item of evidence that Ito said is relevant to the trial was a “cheat sheet” of helpful hints that urged a securities sales force to target the “weak, meek and ignorant” in selling bonds issued by Lincoln’s parent company, American Continental Corp. But prosecutors would first have to establish that bond sellers used the document as a regular part of their sales pitches, he told lawyers.

Ito did not, however, make a final ruling on five items that Keating wants excluded from the trial. Ito said he would decide as such evidence comes up during the trial.

Stephen C. Neal, Keating’s lawyer, said he would be seeking later this week to bar additional prosecution evidence in the case.

The 67-year-old Keating, former American Continental chairman, is accused in a 20-count indictment of violating state securities laws by making false statements or omitting material information in selling his company’s risky bonds through the Southern California branches of Irvine-based Lincoln. He faces a maximum punishment of 10 years in prison if convicted.

Thousands of small investors, mainly elderly Lincoln depositors, contend that they were duped into buying the bonds, in part, through assurances about the safety of the bonds and the financial health of the Phoenix company.