Judge Cogan found that the information about who controlled the bonds was material information for investors. He also ruled that there was enough evidence to establish Mr. Nordlicht’s criminal intent because he knew that bonds were held by Beechwood.

But according to the judge, allowing the verdict against Mr. Nordlicht to stand “would be a manifest injustice” because holding the bonds through Beechwood “suggests that, although Nordlicht knew about the affiliate rule, he and Beechwood went to great lengths to comply with” that rule. The judge found that the prosecutors had failed to introduce sufficient evidence to prove their case.

In overturning Mr. Levy’s conviction, Judge Cogan found that “the inference that Levy was so deeply affected by Nordlicht’s cursory criticism, and so concerned about Nordlicht’s opinion, that he would enter into a criminal conspiracy to redeem himself is too speculative to sustain a conviction.”

The Justice Department has asked the United States Court of Appeals for the Second Circuit in Manhattan to reject the acquittal of Mr. Levy and overturn the decision to grant a second trial for Mr. Nordlicht.

When a judge overturns a jury verdict, there is a question of whether the defendant can be tried a second time. Judge Cogan acquitted Mr. Levy only after the jury had returned its verdicts, so there is no violation of the double jeopardy clause of the Constitution. Prosecutors have asked the judge to delay setting a date for Mr. Nordlicht’s second trial so the appeal can be heard. If the appeals court reverses Judge Cogan’s decision, the jury’s guilty verdicts will be reinstated.