Judge reverses verdict against NYSE supervisor

A judge took the unusual step Wednesday of reversing a jury verdict, finding that the evidence did not support the fraud conviction of a former New York Stock Exchange supervisor who once oversaw all trading in General Electric Co. stock.

David A. Finnerty had been convicted in October of securities fraud by a jury in U.S. District Court in Manhattan. Even then, Judge Denny Chin cast doubt on the verdict, saying he was troubled by some of the evidence that prosecutors used to convict Finnerty.

On Wednesday, Chin went a step further, saying he was reversing the verdict and ordering a judgment of acquittal because the government had failed to prove that Finnerty engaged in fraudulent or deceptive conduct within the meaning of securities laws.

The ruling was the latest blow to the government’s pursuit of criminal charges against 15 NYSE floor supervisors accused of using their inside positions to earn an estimated $20 million illegally for themselves and their firms.

Of the 15, the government had already dropped charges against seven. Besides Finnerty, two others were convicted, two were acquitted and two pleaded guilty. One defendant remains at large.

Chin said the government had failed to prove that Finnerty’s customers were misled, defrauded or otherwise deceived.

The judge said that if his judgment of acquittal was later reversed or vacated by an appeals court, he would grant the defendant’s request for a new trial.

Chin also took wider swipes at the government’s case, saying there were thorny issues raised by the case.