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Not over yet – New York jury clears former Dewey leaders on multiple counts in partial verdict

A Manhattan jury has found former Dewey & LeBoeuf executives Steven Davis, Stephen DiCarmine and Joel Sanders not guilty on multiple criminal charges related to the largest law firm collapse in legal history, although it is still deliberating a number of more serious charges.

Four months on from the start of the trial, in which the prosecution alleged the trio committed criminal fraud and altered accounts in a bid to prevent Dewey’s demise, a partial verdict delivered yesterday by the jury (7 October) acquitted all three of charges of falsifying business records – with former chair Davis not guilty on 19 counts; ex-executive director DiCarmine not guilty on 17 counts; and former chief financial officer Sanders not guilty on 13 counts.

However, the jury still has multiple other charges to deliberate against the defendants, including several counts of grand larceny and scheme to defraud. The trio could each face up to 25 years in prison if convicted on the charge of grand larceny.

The verdict follows events on Tuesday that saw jurors inform acting Supreme Court justice Robert Stolz that they couldn’t reach a unanimous verdict on most of the charges after 14 days of deliberation. The judge prompted them to resume working towards a verdict using the so-called Allen charge – an order requiring jurors in the minority to reconsider to prevent a hung jury and the prospect of a mistrial.

The long-awaited trial has seen the prosecution allege the trio internationally inflated revenue at Dewey, which at its peak housed around 1,450 lawyers, and used accounting tricks to comply with covenants over its debt arrangements. Unveiled in March last year following a two year investigation, they constituted the first criminal charges following Dewey’s filing for Chapter 11 bankruptcy in 2012 after its ill-fated 2007 merger between Dewey Ballantine and LeBoeuf, Lamb, Greene & MacRae.

Representing the defendants is Morvillo Abramowitz Grand Iason & Anello lawyer Elkan Abramowitz for Davis; Bryan Cave partner Austin Campriello for DiCarmine; and Andrew Frisch, who runs his own New York boutique, for Sanders, who at the beginning of the trial was represented by Hughes Hubbard and Reed securities litigation co-chair Edward Little.