HARTFORD -- A former top executive at Cendant Corp. was convicted yesterday of fraud and other charges, but jurors could not reach a decision about the role of another executive in the case.
E. Kirk Shelton, the company's former vice chairman, was convicted on 12 counts of conspiracy, mail fraud, wire fraud, and securities fraud.
Judge Alvin Thompson declared a mistrial for former chairman Walter Forbes after jurors said they could not reach a verdict on 16 counts.
Shelton and Forbes were accused of inflating revenue by $500 million at Cendant's predecessor, CUC International, to drive up the stock price. The fraud was reported in 1998, causing CUC's market value to drop by $14 billion in one day.
The jury had been weighing the case since Nov. 8.
The trial in US District Court in Hartford began in May and drew 26 witnesses for the prosecution and 21 for the defense. Jurors were given 770 exhibits such as e-mails and other documents used to prosecute and defend the defendants.
Forbes and Shelton had pleaded not guilty to charges of conspiracy, securities fraud, mail fraud, wire fraud, and lying to the Securities and Exchange Commission. Forbes also was charged with insider trading for selling $11 million worth of Cendant stock a few weeks before the accounting scandal was made public.
Prosecutors said they arbitrarily adjusted revenue and expense figures each quarter to meet the targets of analysts. At the end of each fiscal year, the fraud would be covered up by transfering money from a fund for merger-related costs to make it look like revenue.