Republished with full copyright permissions from The San Francisco Press.

In a surprising turn of events, US District Judge Brian Cogan has once again stirred controversy by sparing a hedge fund executive, Daniel Small, from prison despite his conviction for involvement in a fraudulent scheme that defrauded an energy company’s bondholders of $70 million. This decision comes after Judge Cogan previously disregarded guilty verdicts in other cases related to the scandalous hedge fund, Platinum Partners.

While personal distaste for Small and his associates may have played a role in Judge Cogan’s handling of this case, it is worth noting that he has consistently voiced skepticism about the prosecution’s case and the existence of any victims. The judge’s reluctance to accept the jury’s findings raises a significant debate regarding the credibility of the court’s decisions and the protection of investors.

The Platinum Partners scandal has been marred by accusations of widespread fraud and wrongdoing. Mark Nordlicht, founder of Platinum Partners, and co-chief investment officer David Levy, were found guilty in previous trials, only to have their convictions tossed out by Judge Cogan. Despite appeals from prosecutors and the Second Circuit Court of Appeals affirming the validity of the initial verdicts, Judge Cogan remained steadfast in his contention that no crimes were committed.

However, in a departure from his previous stance, Judge Cogan acknowledged the existence of a “criminal mistake” during Small’s sentencing hearing. This concession contrasts with his previous insistence that no victims had suffered financial loss, effectively rendering the initial guilty verdicts meaningless. The judge’s contradictory positions have raised concerns about consistency and fairness within the judicial system.

Expressing his view that Small is a person of integrity who made a “criminal mistake” by cutting corners, Judge Cogan handed down a sentence of probation, defying the prosecution’s recommendation of six months to a year in prison. Praising Small as “a rather noble character,” the judge questioned the severity of the crime and suggested that Small’s error did not amount to robbing others.

This decision has attracted significant attention and criticism, highlighting the need for further evaluation of the judicial system’s handling of white-collar crimes. Given Judge Cogan’s refusal to acknowledge the full extent of the fraud perpetrated by Platinum Partners, concerns have been raised about the deterrent effect of punishments for financial crimes.

As the legal landscape continues to unfold in this case, it is crucial to closely scrutinize the actions of judges and question the implications for accountability within the financial industry. This divisive decision by Judge Cogan underscores the ongoing debate surrounding the prosecution of fraudulent activities and the pursuit of justice for victims of white-collar crime.