A federal judge indicated Tuesday that he won't allow the former head of construction giant KB Home to look into alleged wrongdoing by prosecutors in his stock-options backdating case.
U.S. District Judge Otis Wright said in a hearing that Bruce E. Karatz's lawyers had not convinced him of their claim that prosecutors intimidated two KB Home employees while soliciting testimony in their felony-backdating case against the building company's former chief. Wright's tentative ruling was on the defense team's request for a preliminary hearing to investigate the alleged misconduct. It was among 20 decisions he issued on which witnesses and evidence to allow in Karatz's upcoming trial.
Karatz, 64, pleaded not guilty in March to 19 counts, including mail, wire and securities fraud and making false statements in reports to the Securities and Exchange Commission. He remains free on bond and could face up to 415 years in prison if convicted of all charges.
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