SDNY Drops Securities Fraud Case Against David Stockman and Three Others

On Friday, federal prosecutors from the SDNY dropped securities fraud and other criminal charges against David Stockman (pictured), former CEO of Collins & Aikman Corp., and three others.  Prosecutors advised U.S. District Judge Barbara Jones that pursuing the cases further wouldn’t be in the “interests of justice” following a renewed assessment of evidence in the case, and Judge Jones signed an order dismissing the charges, the WSJ reports.

Elkan Abramowitz, Mr. Stockman’s lawyer, told the WSJ that “we’re gratified the U.S. Attorney reviewed this case again.  We brought to their attention evidence they had not taken into account before the indictment, which clearly showed that Mr. Stockman committed no crimes. It’s to their credit that they acknowledged that.”

The SEC’s related civil case, filed in March 2007, is still pending. In it, the SEC alleges that between 2001 and 2005, Stockman personally directed fraudulent schemes to inflate C&A’s reported income by accounting improperly for supplier payments.

Read the WSJ article

Read the SEC’s Complaint