Gary's new book reviewed. Wasn't Sovereign Equity Management Corporation a "mob on wall street" firm that made a market in GUMM at one time? Didn't a GUMM insider have a account there? Even though Dan said the insider did not remember ever having an account there?
A Swindler's Story and Free Speech
A new book about the mob on Wall Street by a BusinessWeek writer is at the center of a brewing legal controversy
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Born to Steal: When the Mafia Hit Wall Street, by BusinessWeek Senior Writer Gary Weiss, tells the story of Louis Pasciuto, a sleazy stockbroker with mob connections who ripped off gullible investors in small-cap stocks as the bull market raged during the 1990s. The 29-year-old New York native, who cooperated with Weiss, has pleaded guilty to three counts of securities fraud and is now out on bail awaiting sentencing. In exchange for his testimony against other crooked brokers, federal prosecutors had promised him leniency, according to Pasciuto's attorney, Anthony Palumbo.
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Yet, since an article reviewing Weiss's new book appeared in the Apr. 6 New York Times, prosecutors from the U.S. Attorneys office for the Southern District of New York have apparently decided to take a tougher tack with Pasciuto. They've filed a motion to revoke his bail, with a court hearing on the motion set for May 16. If they succeed, Pasciuto could go immediately to jail. Weiss's book chronicling Pasciuto's exploits is set to be officially released on May 14.
Why the change of heart on the prosecutors' part? A spokesperson for the U.S. Attorney declined to comment. But Palumbo says the decision is motivated by vindictiveness. The U.S. Attorneys office was apparently caught unaware by the impending book release, the attorney contends.
"CHILLING EFFECT." Because Pasciuto's sworn testimony has been used in other cases, the book could make life more complicated for prosecutors. Defense attorneys are likely to dig through the pages of Born to Steal looking for inconsistencies and contradictions that could help their clients.
However, Palumbo contends that "They are retaliating against him because they weren't kept on full alert as to what was going on." He asserts that the motion impinges on Pasciuto's right to free expression. "Under the Constitution, Louie has a right to tell his story," he adds.
Paul Aiken, executive director of the Authors Guild, is sympathetic to this view. Though he hasn't read any of the legal documents in the case, he says if prosecutors throw Pasciuto in jail, "clearly, you could have a chilling effect on others who may want to discuss with authors matters of a criminal nature."
SAFETY FIRST? Aiken argues that "there is a compelling public interest in what was happening on Wall Street." While some states and jurisdictions have laws that prevent convicted criminals from profiting from their crimes, federal law and New York State law have no such restrictions, Aiken adds.
According to Palumbo, prosecutors have said they want Pasciuto to go to jail because he might be in jeopardy when the book comes out, since its revelations may anger mob members. Palumbo ridicules this argument. "Who's safer in prison?" he asks. "It doesn't make sense." An excerpt from Weiss's book will be featured in the May 19 issue of BusinessWeek.
By Mike France in New York
Edited by Douglas Harbrecht
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