Case Dropped Against Larchmont Former Bank Exec

by Judy Silberstein

(December 1, 2005) Business pages from New York to Los Angeles to Toronto expressed surprise last week following an announcement on November 21 from NY State Attorney General Eliot Spitzer that he was asking a state judge to drop charges against Larchmont resident and former bank executive Paul Flynn. See: Bank Ex-Exec Arrested in Larchmont:

The case involved allegations of illegal "after-hours" trading of mutual funds and Mr. Flynn's former employer, Canadian Imperial Bank of Commerce, had already agreed to pay $125 million to settle the case in July. In August, two co-defendants, Grant Seeger and William Kenyon, plead guilty and were sentenced to probation.

Mr. Flynn, a Canadian citizen, had pleaded not guilty.

Bloomberg.com wondered if Mr. Spitzer was becoming "a bit gun-shy" after having lost an earlier case against a Bank of America executive in June. USA TODAY speculated that the Attorney General, who is running for governor of New York, was reacting to criticism from political enemies. The Journal News said Mr. Sptizer was "stung in June" by the earlier acquittal and so "retreated" from prosecuting Mr. Flynn.

There is still the possiblity of civil charges from Mr. Spitzer or from the SEC, but criminal charges are no longer hanging over Mr. Flynn.

Things were quiet in Larchmont, where Mr. Flynn, his family members and his lawyer have declined to speak to the media since February 2004 when he was first arrested near his home.

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