In NYC court, judge presiding over SEC vs. Goldman is compassionate, fun and decisive

Goldman case gets decisive, compassionate jurist

NEW YORK — The federal judge presiding over civil fraud charges brought against Wall Street’s most powerful firm can be counted on to run a tight courtroom as she considers claims that Goldman Sachs & Co. took unfair advantage of lax controls on financial institutions.

Lawyers and others who have worked before her say Judge Barbara Jones does not waste time as she commands attorneys to focus their arguments and stick to the key legal issues.

Barry Mawn, who led New York’s FBI office at the time of the Sept. 11, 2001 terrorism attacks and who has since retired, said she can be counted on to have a firm grasp of the legal issues surrounding the Goldman case, regardless of how much she knew about the subject before.

“Some judges can be very quick and decisive but don’t always know what they’re talking about. But Barbara is one of the better judges there,” he said.

Mawn said Jones was known for being “very knowledgeable. She runs a very good courtroom.” And she won’t let arguments stray off point. “She’s very decisive. Both as a prosecutor and as a judge, she was always on the money,” he said.

Jones will find the spotlight bright as she tackles legal issues surrounding the allegations by the Securities and Exchange Commission that Goldman Sachs cost investors close to $1 billion by failing to tell them that subprime mortgage securities they bought had been chosen with help from a Goldman hedge fund client that was betting the investments would fail.

Goldman, founded more than 140 years ago, has denied any impropriety.

Usually, civil lawsuits targeting companies end up being settled, but a judge’s ruling on legal issues surrounding the case can still play a pivotal role.

The course the case follows also could influence criminal investigators, who reportedly are taking a preliminary look at whether major banking institutions misled investigators about complex mortgage-related securities created to profit from the housing bubble.

Lawyers on both sides will face a judge known as a quick study of complex issues, someone who worked from 1977 to 1987 as a federal prosecutor in Manhattan and spent another eight years as first assistant district attorney under then-Manhattan District Attorney Robert M. Morgenthau.

Sworn to the bench in 1995 after her appointment by President Clinton, Jones quickly won the hearts of federal courthouse workers in Manhattan with annual holiday parties where she sported a red Santa hat and personally welcomed them all, from fellow judges to janitors.

She was not on the bench more than two years before she found herself presiding over a sensational trial involving allegations that a young woman who claimed to be the daughter of comedian Bill Cosby had tried to extort $40 million from the entertainer. Autumn Jackson was convicted and sentenced to just over two years in prison for extortion and conspiracy.

Jones may be best known though for the 25-year sentence she handed WorldCom Corp.’s former chief, Bernard Ebbers. At the time, the sentence seemed to push the outer limits of what penalties high-profile top executives could face for fiscal misdeeds.

Jones bestowed the sentence on Ebbers in her matter-of-fact manner, saying: “I find that a sentence of anything less would not reflect the seriousness of this crime.”

She also made swift work of a hearing leading to the transfer of Zacarias Moussaoui from Manhattan to Virginia to face charges in the Sept. 11, 2001, terrorist attacks. He is serving a life sentence after pleaded guilty in 2005 to conspiring with al-Qaida to hijack aircraft.

Historically, she has shown compassion to those who cooperate with law enforcement authorities or who face personal or family traumas.

She gave only a five-year prison term in 2005 to Scott Sullivan, Worldcom’s chief financial officer, when an $11 billion accounting fraud was carried out — the then-largest in U.S. history. She cited his cooperation with the government and the fact that his wife was seriously diabetic, unable to care for the couple’s young daughter during her frequent hospitalizations.

It was the same compassionate side she displayed in 1999 when she spared the founder of the Boys Choir of Harlem any prison time for a tax evasion conviction, citing all the breaks Walter Turnbull had given children over the years.

“Dr. Turnbull isn’t just someone who does his job excellently,” she said at the time. “He goes way beyond that, contributing his own personal money at times to keep the choir going.”

Attorney Charles Stillman, who represented Turnbull, said her action in the case belied her “reputation of being tough.”

He added: “Under that tough exterior, Barbara’s a good person.”

Jones was born in 1947 in Inglewood, Calif., but her father’s job at an airline led her to spend parts of her childhood in Brooklyn, N.Y., and Cairo as well.

She obtained her bachelor’s degree in political science from Mount St. Mary’s College in 1968 and graduated from the Temple University School of Law in 1973. Rather than choosing private practice, she entered public service, working from 1973 to 1977 as a Justice Department special attorney for the Manhattan Strike Force Against Organized Crime and Racketeering.

The experience served her well when she in 1977 joined the federal prosecutor’s office, where she earned a reputation as a pioneer in the use of racketeering laws to send organized crime figures to prison for long periods.

Charles Ross, a veteran defense lawyer in Manhattan, said her experience as a prosecutor has helped to shape her courtroom demeanor as well, leaving her focused and unintimidated on the bench.

“She’ll cut to the chase. She wants you to be focused. She wants a prepared lawyer,” he said. “She truly understands litigation. She’ll be fair to both sides.”

He added that she does not wield an “unfair iron hand but she’s in charge of that courtroom.”