Stock Trader Judge Komitee’s Conflict Escalating in Watson Case and He Can’t Sell Short!

The trial of Carlos Watson may be one for the history books.

The U.S. Attorney for the Eastern District of New York instructed the grand jury to indict Carlos Watson with:

1. Conspiracy to commit securities fraud

2. Conspiracy to commit wire fraud

3. Aggravated identity theft

What’s unusual here is that the first two charges—conspiracy to commit securities fraud and conspiracy to commit wire fraud—are conspiracy charges without matching substantive charges for actual securities fraud or wire fraud.

Lack of Matching Substantive Charges:

The US Attorney charged Watson with conspiring to commit fraud but did not charge him with carrying out the fraud itself. This suggests the prosecution did not have sufficient evidence to prove that Watson directly committed fraud, but believed it could prove that he agreed or conspired with others to do so.

To convict someone of conspiracy, prosecutors do not need to prove the crime was completed—only that there was an agreement to commit the crime and an overt act to further that agreement. In contrast, to convict on a substantive charge of fraud, the prosecution must prove that the fraud occurred.

By focusing on conspiracy charges, prosecutors secured a conviction without having to show Watson personally executed fraudulent acts. They only needed to convince the jury that he was part of a plan to commit fraud.

The prosecution focused on circumstantial evidence, like emails or witness testimony, particularly of the cooperator Samir Rao – that showed an agreement or coordination without needing a “smoking gun” of actual fraudulent acts.

Without direct evidence of fraud, the conspiracy charges seemed to attempt to punish Watson for the actions of actual, admitted fraudsters, the cooperators Samir Rao and Suzee Han, who admitted they committed fraud and will largely escape punishment – as cooperators typically get 80-100 percent of their sentences shaved off, provided the defendant they testify against is convicted a powerful motive to lie.

It was a weak case, and Watson had stellar attorneys – famous Harvard law professor and criminal defense lawyer Ronald Sullivan, former CT judge Shannon Frison, and former NYC prosecutor Janine Gilbert. The prosecution team of three young assistant US Attorneys was inexperienced.

Watson should have had a chance. However, a review of the trial record shows it was railroading not by the prosecutors or the evidence, but by the judge.

During the trial, his bias was so palpable that observers thought he did not like Watson. People who watched Judge Eric Komitee’s rudeness and disdain for Watson and his defense team and his solicitude and patience for the prosecution, and had a personal affinity with the prosecutors, perhaps because he was once a young prosecutor in the same EDNY office when he was about their age.

Now, it appears much more.

The Victims in Watson Were the Judge’s Friends and Partners

The presiding judge, Eric R Komitee, made tens of millions before he became a judge during a 10-year stint as general counsel and manager of Viking Global Investors LP, an investment firm managing more than $48 billion of capital. In a bizarre, if not obscene conflict of interest, which may come the closest of a federal judge trying a case where a victim or a party to the case in recent history, Komitee, whose net worth is around $100 million, sat in judgment in the Watson case where the prosecutors alleged the primary “victims” of Watson’s conspiracy were Goldman Sachs, JP Morgan Chase and Google.

Ironically, Judge Komitee made the bulk of his fortune with Viking based on close relationships with all three companies. Through his tens of millions in hedge funds, he still invests in the stocks of the companies Watson allegedly victimized. And his closest friends are in the business. His relationships run deep with Goldman Sachs and J P Morgan Chase, and he would be perjuring himself if he denied having many meetings, business deals, calls, in-person meetings, dinners, and galas with the inner circle group of the hedge fund industry, of which he was a major player – and as a federal judge who doubles as a stock trader with tens of millions to invest – he still is.

He is an insider in the world of Goldman Sachs, JP Morgan Chase – the alleged victims of Watson. 

That might explain it. If a guy was before you who allegedly cheated your best friends and the companies that made you rich, and with whom you still invest, you might have a bit of bias, too. This might explain why Komitee made sure Watson lost. 

The astonishing thing is somehow – and it is delusional – Judge Komitee thinks he can escape this outing of his conflict. He cannot, but he thinks he can. He has asked the prosecution to fight for him – using such technicalities as to direct them to argue Watson did not file a motion exposing his conflict until after the trial – as if it was Watson’s job – not the judge himself, who has the duty to recuse when he has a conflict.

Then in a moment that marked the kind of cupidity that no doubt helped this judge become a millionaire a hundred times over, he challenged Watson, saying how do you even know I have stock in your victim’s companies?

Conflict Apparent to Everyone

It is outrageous. He knows he has stock in those companies. He is like the little boy caught eating a stolen cherry pie. He tells the guy who caught him, how do you know I stole your pie??

Because you have cherry filling all over your face.

Komitee’s own financial disclosures show, and his bio also shows, his conflict. He has not denied it. Instead, he tries to deflect, asking how do you know I am conflicted?

It is not just the cherry pie on the lips – in Komitee’s case, his awful record of bias at the trial, but also his whole life, shows he has a conflict.

This case will certainly not go away. Komitee knows how deep his relationships are with Goldman Sachs, JP Morgan and Google.

There are literally dozens of people, who, also in the financial industry, an industry that this judge never left, signed affidavits or are willing to sign affidavits, attesting to how close this stock-trader judge, this super rich and super conflicted judge, still is to the alleged victims of the Watson case.

He is honestly delusional if he fails to recognize that the evidence of his conflict will not come out, and he cannot depend on the system covering it up for him. Neither money nor legal fictions or cover-ups can hide the enormity of his conflicts. And more will come out. Evidence of two kinds — evidence of his unbelievable misconduct at the Watson trial, combined with his super conflicted relationships with the Watson victims.

When you see it all put together, which I plan to share with readers, and, no doubt, Watson’s lawyers will bring it out before the US Court of Appeals for the Second Circuit, you will see Eric Komitee’s fate is far more certain than Carlos Watson’s.

Frank Parlato

Frank Parlato is an investigative journalist, media strategist, publisher, and legal consultant.

Frank Parlato

Frank Parlato is an investigative journalist, media strategist, publisher, and legal consultant.

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