Prosecutors File a ‘Nolle’, Drop Charges Against David Stockman

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Associated Press

David Stockman, former budget director during President Reagan’s tenure exits Manhattan federal court Monday, March 26, 2007


Let’s talk nolle prosequi.

It’s Latin for “we shall no longer prosecute.” In a criminal case, according to this law.com definition, it’s an admission that the charges cannot be proved, that evidence has demonstrated either innocence or a fatal flaw in the prosecution’s claim or that the prosecutor has become convinced the accused is innocent.

This morning, the SDNY filed a nolle, dropping the securities fraud and other criminal charges against former Collins & Aikman CEO David Stockman and three others. Here’s the filing, signed by AUSA Marc Berger.

Prosecutors said further prosecution of Stockman, the former White House budget director under President Reagan, and three other former execs, wouldn’t be in the “interests of justice” following a renewed assessment of evidence in the case.

Some of you might remember Stockman. Beginning in 2007, prior to his indictment, he became particularly vocal about what he saw as the injustice of the case against him. Responding to news that prosecutors were poised to file criminal charges against him, he told the WSJ: “If this happens, it’s a miscarriage of justice. This was a self-evident struggle for survival, not some economic joyride like Enron.”

Thereafter, Stockman, who was Collins & Aikman’s CEO from August 2003 to May 2005 and served on its board from 2000 to May 2005, and three others were charged, with engaging in a series of frauds and lying to the public about the cash-strapped auto supplier’s financial health to keep it from collapsing.

“We’re gratified the U.S. attorney reviewed this case again,” said Elkan Abramowitz, Stockman’s lawyer. “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.”

A civil case brought by the SEC is still pending.

For some interesting color on how the case exhausted Collins & Aikman’s D&O insurance policy, go to The Race to the Bottom blog.