A U.S. appeals court on Monday overturned the convictions of the former chief executive officer and chief financial officer of surgical device maker ArthroCare Corp for engineering what federal prosecutors called a $750 million securities fraud.
The 5th U.S. Circuit Court of Appeals in New Orleans agreed with former CEO Michael Baker and former CFO Michael Gluk that the trial judge in Austin, Texas, erred in excluding evidence suggesting that other people committed the fraud and had misled one or both executives.
Excluding evidence from probes by the U.S. Securities and Exchange Commission and the law firm Latham & Watkins "was not harmless error," Circuit Judge E. Grady Jolly wrote for the appeals court, which ordered a new trial.
The 5th U.S. Circuit Court of Appeals in New Orleans agreed with former CEO Michael Baker and former CFO Michael Gluk that the trial judge in Austin, Texas, erred in excluding evidence suggesting that other people committed the fraud and had misled one or both executives.
Excluding evidence from probes by the U.S. Securities and Exchange Commission and the law firm Latham & Watkins "was not harmless error," Circuit Judge E. Grady Jolly wrote for the appeals court, which ordered a new trial.
