Legal News

Feds say Karatz advice-of-counsel defense isn't believable

By Richard Binder

In attempting to quash Bruce Karatz's motion for a new trial, federal prosecutors argued that the former KB Home chief executive could not have relied on advice about stock-options backdating from his company's general counsel because he lied during an internal investigation into the practices.

In his motion for new trial, Keker of San Francisco's Keker & Van Nest argued that Karatz was erroneously denied an instruction to the jury declaring that his client could not have fraudulently concealed KB Home's options practices if there was proof that he had relied on Hirst's advice.

Prosecutors replied that an advice-of-counsel instruction to the jury would have had no effect on the verdict, because Karatz lied to company lawyers and auditors about backdating.

Karatz, who faces up to 80 years in prison, is scheduled to be sentenced on Sept. 15.

Full story at NLJ.com.

Full post as published by Legal Pad | LA on July 22, 2010 (boomark / email).