"It's a very sweet victory," Phillips' attorney, Abbe D. Lowell of Manatt, Phelps & Phillips Partners in Washington, DC, tells GlobeSt.com. The jury had been deliberating since Feb.1 after hearing testimony in the five-defendant trial for three and a half months. "The federal government put an enormous amount of resources into lumping Mr. Phillips in with the others," Lowell says of the investigation and trial heard in the Southern District of New York. He and Steven F. Reich represented the defendants.

Also acquitted was Cal Rossi, a former Basic Capital executive who managed the firm's capital markets unit. Convictions were levied against businessmen Glenn B. Laken of Chicago's TradeVentureFund and John M. Black Jr., a principal of Grady and Hatch & Co. of New York City.

Basic Capital Management is wholly owned by the Gene E. Phillips Children's Trust, for which the acquitted developer acted as the representative, Lowell explained. Phillips' relationship to Basic Capital has been a focal point for numerous media interviews and the Federal Bureau of Investigation in its yearlong scrutiny. The US Attorney's Office indicted 120 people, the largest group ever charged simultaneously in an alleged securities fraud. The arrests were made in New York, Connecticut, New Jersey, Pennsylvania, Maryland, Virginia, Alabama, Georgia, Florida, Illinois, Texas, Utah and California.

The "Operation Uptick" roster included 10 alleged members and associates of organized crime, a former New York Police Department detective, 57 licensed and unlicensed stockbrokers, three recruiters of corrupt brokers, 12 stock promoters, 30 officers, directors or other "insiders" of companies, two accountants, an attorney, investment adviser and hedge fund manager, according to the June 2000 indictment. The government alleged that the network of "pump and dump" Internet schemes resulted in $50 million in losses and involved publicly traded securities of 19 companies and the private placement of securities in 16 other businesses.

Basic Capital serves as adviser and manager for American Realty Investors Inc., Income Opportunity Realty Investors Inc. and Transcontinental Realty Investors Inc., which reportedly own in excess of $175 million in property. The 63-year-old Phillips is considered one of Dallas' key wheelers and dealers in land transactions. There are still a number of class action suits working their way through the civil courts that Phillips and Basic Capital must face.