Delaware U.S. District Attorney David Weiss is seeking a rehearing of a U.S. Court of Appeals decision that overturned the convictions of former executives of Wilmington Trust.
The U.S. Attorney for Delaware argued in a court filing that the Appeals Court in Philadelphia came up with a new standard of falsity in a “manner inconsistent with precedent and that could present practical problems.”
The Court of Appeals “should have affirmed defendants’ convictions on conspiracy and securities fraud charges since the government presented a valid alternative basis for conviction on these counts,” the filing stated. “Those features make this decision an outlier among other circuits in falsity cases and among the Third Circuit in other contexts evaluating objective reasonableness.”
The filing goes on to claim that the decision improperly limited the of the trial court.
The sweeping nature of the Court of Appeals decision came as a surprise to some legal observers who believed prosecutors had proven that the executives that included former President Robert Harra, along with David Gibson, William B. North and Kevyn Rakowski. had concealed the serious nature of bad loans in the bank’s portfolio.
Prior to being charged, Harra was well-known and highly regarded for his work in the community.
Defense attorney argued that the government failed to prove that their actions rose to the level of criminal activity.
Disclosure of loan problems led to a collapse in Wilmington Trust’s stock price and what was described as a “take under” $300 million acquisition of the company by M&T. M&T was also part of a criminal case, but settled the matter under a financial settlement.
Not named in any of the civl and criminal actions was former Wilmington Trust CEO Ted Cecala.