Manhattan Court Storm Closing Delays Inside-Trading Trial
The U.S. District Court in lower Manhattan, the primary venue for major financial litigation with jurisdiction over the New York Stock Exchange and bank headquarters, will be closed for the week as a result of the super-storm that pummeled the region.
The closure has delayed jury selection for the insider- trading trial of Todd Newman, a former Diamondback Capital Management LLC portfolio manager, and Level Global Investors LP co-founder Anthony Chiasson, who were to go on trial Oct. 29.
Prosecutors alleged Chiasson, Newman and a group of analysts, fund managers and insiders at technology companies swapped illegal tips on Dell Inc. (DELL) and Nvidia Corp. (NVDA), earning more than $67 million. The storm interrupted the trial of Bruce Bent, co-founder of the Reserve Funds, in a suit by the Securities and Exchange Commission over the failure of the money market fund in the wake of Lehman Brothers Holdings Inc.’s 2008 collapse.
The New York court near Foley Square is operating on emergency generator power, Edward Friedland, the district executive of the U.S. Southern District of New York, said yesterday in an e-mail. The district’s satellite courts in White Plains and Middletown, north of New York City, are open, he said.
“We are working around the clock the restore full operations of all SDNY facilities,”Friedland said. “However, most of the issues that need to be resolved in order for all of our facilities to become functional are beyond our control.”
U.S. District Judge Loretta Preska, the chief judge of the Southern District, ordered extended until Nov. 5 deadlines in criminal cases. She said her order is retroactive to Oct. 29, the day the storm, formerly Hurricane Sandy, hit the New York metropolitan area. Federal court rules and laws limit the amount of time prosecutors have to bring a defendant to trial.
Preska said the extension was merited because the storm has rendered transportation to the courthouse ‘difficult and in some cases impossible.’’ Preska issued a parallel order covering civil cases.
This is the first time the Manhattan Federal courthouse has been closed for this long since the Sept. 11, 2001, terrorist attacks, said Stephanie Cirkovich, a spokeswoman for Friedland.
The courthouse and all federal buildings in Lower Manhattan, including FBI headquarters, were evacuated the morning of Sept. 11, 2001, out of concerns among U.S. officials that they might be the target of another terrorist attack. The buildings weren’t reopened to the public for one week.
The U.S. Bankruptcy Court in Manhattan, the busiest in the nation and located near the southern tip of Manhattan, is also closed.
The cases are U.S. v. Newman, 12-00124, U.S. District Court, Southern District of New York (Manhattan); SEC v. Reserve Management Co., 09-cv-04346, U.S. District Court, Southern District of New York (Manhattan).
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