Convictions in the ‘80s, Reversals in ‘90s : Law: Critics say prosecutors eager to combat Wall St. crime were in fact overzealous. They point to recent cases overturned on appeal.

NEW YORK —  A backlash against overzealous prosecutions is why an appeals court has reversed major convictions stemming from the government’s attack on Wall Street crime, defense attorneys and legal experts said Friday.

Supporters of the campaign say the recent appellate setbacks have done nothing to diminish the importance of guilty pleas by such big-name defendants as Ivan F. Boesky and Michael Milken.

Still, the reversals have refocused attention on the 1980s era of tough-guy justice promoted by Rudolph W. Giuliani, the crusading former U.S. attorney of the 1980s in the nation’s busiest federal court.

Giuliani, now in private practice, made headlines with high-profile arrests and stiff criminal charges against white-collar financial professionals, many of whom pleaded guilty rather than face the ordeal of a drawn-out court battle.

“The ordeal of going through a trial only to be exonerated on appeal is something you hope your client never has to go through,” said defense attorney Andrew Lawler.

His client, former stock trader Timothy L. Tabor, was arrested in a 1987 well-publicized insider trading case and held in prison overnight. But charges were later dropped and prosecutors never sought a new indictment.

“The significance of that era is that a substantial number of defendants opted to accept criminal convictions without trial,” said David Ruder, a law professor at Northwestern University, who was chairman of the Securities and Exchange Commission in the late 1980s.

The debate over the legacy left by Giuliani was prompted by three rulings of the U.S. 2nd Circuit Court of Appeals--all critical of prosecutorial decisions and tactics.

The most dramatic ruling came Wednesday when the court threw out the conviction of stock speculator John A. Mulheren Jr., who was accused of manipulating stock with Boesky, the famed insider trader.

The court said “no rational trier of facts” could have proved the charges against Mulheren.

Less than two weeks earlier, the same appeals court ordered a new trial for the defendants in the Princeton-Newport Partners tax fraud case, viewed as an important test case for the use of racketeering laws in white-collar prosecutions. The court upheld securities fraud convictions of some of the defendants.

In March, the court ordered a new trial for the GAF Corp. and a former executive, James T. Sherwin, on stock manipulation charges.

“I think the 2nd Circuit is reflecting its feelings that the prosecutions have been a little overzealous,” said defense attorney Arthur Mathews, who is appealing the securities fraud conviction of Paul A. Bilzerian, ex-chairman of Singer Co.

Mathews said the U.S. attorney’s office ended up bringing “marginal” cases such as the Mulheren prosecution because it had to justify making deals with criminals such as Boesky, who served two years in prison for his 1986 plea to criminal charges related to insider trading.

“You don’t let them off easy unless you say they’re giving us somebody else,” Mathews said.

Defense attorneys also said Giuliani tried to criminalize conduct historically subject to civil penalties.

“The reversals constitute a rejection of this unprecedented use of the criminal laws,” said Theodore V. Wells Jr., who represented one of the Princeton-Newport defendants.

Giuliani, who left office in 1989 to run unsuccessfully for mayor, did not return calls made to the law firm where he now practices. But following the Mulheren reversal, he was quoted in the New York Times as defending his record because the biggest cases resulted in convictions.