Seven counts of fraud were dismissed in the criminal case against former Bank of America broker Theodore Sihpol Wednesday after the defense successfully contested charges of destroying and falsifying records.

Presiding over the New York State Supreme Court in Manhattan, Judge James A. Yates ruled that any trade order tickets that were discarded before they were could be executed could not be considered official business records. Sihpol held the order tickets until he received a phone call from the hedge fund manager Canary Capital Partners after the market close instructing him to either put the order through or cancel it. In other words, the cancelled orders do not qualify as records under the law.

"I like to live my life without going through futile gestures," Yates told the court as he dismissed the charges.

Two counts of fraud initially brought by the prosecution also were withdrawn because it failed to prove the falsification of records. The charges related to orders received after 4 p.m. that were stamped with a time prior to the close. In what was a confusing legal debate, the defense argued that a record couldn't be a false record and a true record simultaneously.

"It's nonsense on stilts," said Paul Shechtman, one of Sihpol's attorneys. "The minute he puts a line through it, it becomes a false record."

Despite the dismissal of some of the charges, Sihpol still faces up to 25 years in prison on 33 counts of grand larceny and fraud. Sihpol, 37, is accused of helping Canary to trade rapidly in and out of mutual funds overseen by Bank of America in a scheme that bilked long-term shareholders and generated higher fees for the bank. Sihpol, wearing a pink tie, pink shirt and a navy suit, appeared calm and confident in the courtroom. Ahead of the proceedings, he was overheard talking about installing some new stereo equipment in his Connecticut home.

After submitting several pieces of new evidence, the defense rested, opting not to call Jonathan Macey, a professor at Yale Law School. The defense was hoping Macey could tell the jury that late trading among mutual funds was common practice on Wall Street and that it was engrained into the corporate culture. In the end, Yates ruled that Macey could only speak to the fundamentals of mutual fund trading and not whether Sihpol had a reasonable belief that what he was doing was wrong.

"The law is decided by the court, not by an expert," Yates told Sihpol's attorneys.

"Obviously, we're very disappointed," Shechtman told reporters outside the courtroom. "But this is a very good trial judge and we have to live by his rules."

The final pieces of evidence that were submitted to the court came in the form of an e-mail dated May 8, 2001, which contained a trading proposal in an attachment. After hearing the defense's argument on why it should be entered into evidence, the judge agreed to allow it but said, "It can come in on intent, but not on the issue of value."

Before dismissing the jury for the day, the judge instructed them not to make a decision on the trial until after they hear the closing arguments from the lawyers, what the law states and what each of their peers on the jury have to say.

Closing arguments for both sides will be heard on May 31.

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