Stuart_Wolff_Trial_Judge@AOL.com

A judge's financial interest in America Online has led a panel of three U.S. 9th Circuit Court of Appeals judges to toss out the conviction of former Homestore (now known as Move Inc.) CEO Stuart Wolff, and government prosecutors are weighing whether to ask another group of judges to reconsider the matter or to prepare for a completely new trial (see Inman News).

A jury convicted Wolff in June 2006 of 18 counts, ranging from conspiracy to falsify Homestore's books and records to lying to accounts and illegal insider trading. At the center of the trial were a number of so-called "triangular" financial transactions in which Homestore paid money to other companies that eventually circulated back to Homestore and was reported as revenues. AOL played a key role in these transactions, which amounted to about $67 million in revenue. During the trial, U.S. District Court Judge Percy Anderson acknowledged that he "owns stock in AOL" though another judge determined that Anderson's financial interest did not disqualify him from presiding over the lawsuit.

But in the Monday court filing, the panel of judges found that Anderson should have been disqualified from the case, and ruled to "vacate the conviction and sentence" and send the case back to the U.S. District Court with a new judge.

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