February 24, 2021

Warrantless Cellphone Tracking Is Upheld

The closely watched case, in the Fifth Circuit of the United States Court of Appeals in Texas, is the first ruling that squarely addresses the constitutionality of warrantless searches of historical location data stored by cellphone service providers. Ruling 2 to 1, the court said a warrantless search was “not per se unconstitutional” because location data was “clearly a business record” and therefore not protected by the Fourth Amendment.

The ruling is likely to intensify legislative efforts, already bubbling in Congress and in the states, to consider measures to require warrants, based on probable cause, to obtain cellphone location data.

The appeals court ruling sharply contrasts with a New Jersey State Supreme Court opinion in mid-July that said the police required a warrant to track a suspect’s whereabouts in real time. That decision relied on the New Jersey state Constitution, whereas the ruling Tuesday in Texas was made on the basis of the federal Constitution.

The Supreme Court has yet to weigh in on whether cellphone location data is protected by the Constitution. The Texas case is not expected to go to the Supreme Court because it is “ex parte,” or filed by only one party — in this case, the government.

But the case could renew calls for the highest court to look at the issue, if another federal court rules differently on the same question. And two other federal cases involving this issue are pending.

“The opinion is clear that the government can access cell site records without Fourth Amendment oversight,” said Orin Kerr, a constitutional law scholar at George Washington University Law School who filed an amicus brief in the case.

For now, the Texas ruling sets an important precedent: It allows law enforcement officials within the Fifth Circuit to chronicle the whereabouts of an American with a court order that falls short of a search warrant based on probable cause.

“This decision is a big deal,” said Catherine Crump, a lawyer with the American Civil Liberties Union. “It’s a big deal and a big blow to Americans’ privacy rights.”

The group reviewed records from more than 200 local police departments last year, concluding that the demand for cellphone location data had led some cellphone companies to develop “surveillance fees” to enable police to track suspects.

In reaching its decision on Tuesday, the appeals court in Texas went on to agree with the government’s contention that consumers knowingly give up their location information to the telecommunications carrier every time they make a call or send a text message on their cellphones.

“That means it is not protected by Fourth Amendment when the government goes to a third-party service provider and issues something that is not a warrant to demand production of those records,” said Mark Eckenwiler, a former Justice Department lawyer who worked on the case and is now with the Washington law firm Perkins Coie. “On this kind of historical cell site information, this is the first one to address the core constitutional question.”

Historical location data is crucial to law enforcement officials. Mr. Eckenwiler offered the example of drug investigations: A cellphone carrier can establish where a suspect met his supplier and how often he returned to a particular location. Likewise, location data can be vital in establishing people’s habits and preferences, including whether they worship at a church or mosque or whether they are present at a political protest, which is why, civil liberties advocates say, it should be accorded the highest privileges of privacy protection.

The decision could also bear implications for other government efforts to collect vast amounts of so-called metadata, under the argument that it constitutes “business records,” as in the National Security Agency’s collection of Verizon phone records for millions of Americans.

“It provides support for the government’s view that that procedure is constitutional, obtaining Verizon call records, because it holds that records are business records,” said Mr. Kerr, of George Washington University. “It doesn’t make it a slam dunk but it makes a good case for the government to argue that position.”

An important element in Tuesday’s ruling is the court’s presumption of what consumers should know about the way cellphone technology works. “A cell service subscriber, like a telephone user, understands that his cellphone must send a signal to a nearby cell tower in order to wirelessly connect his call,” the court ruled, going on to note that “contractual terms of service and providers’ privacy policies expressly state that a provider uses a subscriber’s location information to route his cellphone calls.”

In any event, the court added, the use of cellphones “is entirely voluntary.”

The ruling also gave a nod to the way in which fast-moving technological advances have challenged age-old laws on privacy. Consumers today may want privacy over location records, the court acknowledged: “But the recourse for these desires is in the market or the political process: in demanding that service providers do away with such records (or anonymize them) or in lobbying elected representatives to enact statutory protections.”

Cellphone privacy measures have been proposed in the Senate and House that would require law enforcement agents to obtain search warrants before prying open location records. Montana recently became the first state to require a warrant for location data. Maine soon followed. California passed a similar measure last year but Gov. Jerry Brown, a Democrat, vetoed it, saying it did not strike what he called the right balance between the demands of civil libertarians and the police.

Article source: http://www.nytimes.com/2013/07/31/technology/warrantless-cellphone-tracking-is-upheld.html?partner=rss&emc=rss

DealBook | The Trade: An Asset So Toxic They Called It ‘Nuclear Holocaust’

The headquarters of Morgan Stanley in Manhattan.Richard Drew/Associated PressThe headquarters of Morgan Stanley in Manhattan.

On March 16, 2007, Morgan Stanley employees working on one of the toxic assets that helped blow up the world economy discussed what to name it. Among the team members’ suggestions: “Subprime Meltdown,” “Hitman,” “Nuclear Holocaust” and “Mike Tyson’s Punchout,” as well a simple yet direct reference to a bag of excrement.

Ha ha. Those hilarious investment bankers.

Then they gave it its real name and sold it to a Chinese bank.

We are never going to have a full understanding of what bad behavior bankers engaged in in the years leading up to the financial crisis. The Justice Department and the Securities and Exchange Commission have failed to hold big wrongdoers to account.

The Trade
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We are left with what scraps we can get from those private lawsuits lucky enough to get over the high hurdles for document discovery. A case brought in a New York State Supreme Court in Manhattan against Morgan Stanley by a Taiwanese bank, which bought a piece of the same deal the Chinese bank did, has cleared that bar.

The results are explosive. Hundreds of pages of internal Morgan Stanley documents, released publicly last week, shed much new light on what bankers knew at the height of the housing bubble and what they did with that secret knowledge.

The lawsuit concerns a $500 million collateralized debt obligation called Stack 2006-1, created in the first half of 2006. Collections of mortgage-backed securities, C.D.O.’s were at the heart of the financial crisis.

But the documents suggest a pattern of behavior larger than this one deal: people across the bank understood that the American housing market was in trouble. They took advantage of that knowledge to create and then bet against securities and then also to unload garbage investments on unsuspecting buyers.

Morgan Stanley doesn’t see the narrative as the plaintiffs do. The firm is fighting the lawsuit, contending that the buyers were sophisticated clients and could have known what was going on in the subprime market. The C.D.O. documents disclosed, albeit obliquely, that Morgan Stanley might bet against the securities, a strategy known as shorting. The firm did not pick the assets going into the deal (though it was able to veto any assets). And any shorting of the deal was part of a larger array of trades, both long and short. Indeed, Morgan Stanley owned a big piece of Stack, in addition to its short bet.

Regarding the profane naming contest, Morgan Stanley said in a statement: “While the e-mail in question contains inappropriate language and reflects a poor attempt at humor, the Morgan Stanley employee who wrote it was responsible for documenting transactions. It was not his job or within his skill set to assess the state of the market or the credit quality of the transaction being discussed.”

Philip Blumberg, the Morgan Stanley lawyer who composed most of the names, meet the underside of a bus, courtesy of your employer.

Another Morgan Stanley employee sent an e-mail that same morning, suggesting that the deal be called “Hitman.” This might have been an attempt to manage up, because “Hitman” was the nickname of his boss, Jonathan Horowitz, who helped head the part of the group that oversaw mortgage-backed C.D.O.’s. Mr. Horowitz replied, “I like it.”

Both Mr. Blumberg and Mr. Horowitz, now at JPMorgan, declined to comment through representatives at their banks.

In February 2006, Morgan Stanley began putting together the Stack C.D.O. According to an internal presentation, Stack “represents attractive business for Morgan Stanley.”

Why? In addition to fees, another bullet point listed: “Ability to short up to $325MM of credits into the C.D.O.” In other words, Morgan Stanley could — and did — sell assets to the Stack C.D.O., intending to profit if the securities backed by those assets declined. The bank put on a $170 million bet against Stack, even as it was selling it.

In the end, of the $500 million of assets backing the deal, $415 million ended up worthless.

“While investors and taxpayers all over the world continue to choke on Wall Street’s toxic subprime products, to this day not a single major Wall Street executive has been held accountable for misconduct relating to those products,” said Jason C. Davis, a lawyer at Robbins Geller who is representing the plaintiff in the lawsuit. “They are generally untouchable, but we are pleased that the court in this case is ordering Morgan Stanley to turn over damning evidence, so that the jury will get to see what Morgan Stanley really knew about the troubled nature of its supposedly ‘higher-than-AAA’ quality product.”

Why might Morgan Stanley have bet against the deal? Did its traders develop a brilliant thesis by assessing the fundamentals of the housing market through careful analysis of the public data? The documents suggest something more troubling: bankers found out that the housing market was diseased from their colleagues down the hall.

Bankers were getting information from fellow employees conducting and receiving private assessments of the quality of the mortgages that the bank would purchase to back securities. These reports weren’t available to the public. It would be crucial information for trading in securities backed by those kinds of mortgages.

In one e-mail from Oct. 21, 2005, a Morgan Stanley employee warned a banker that the mortgages Morgan Stanley was buying from loan originators were troubled. “The real issue is that the loan requests do not make sense,” he wrote. As an example, he cited “a borrower that makes $12K a month as an operation manger (sic) of an unknown company — after research on my part I reveal it is a tarot reading house. Compound these issues with the fact that we are seeing what I would call a lot of this type of profile.”

In another e-mail from March 17, 2006, another Morgan Stanley employee wrote about a “deteriorating appraisal quality that is very flagrant.”

Two of the employees who received those e-mails joined an internal hedge fund, headed by Howard Hubler, that was formed only the next month, in April 2006. As recounted in Michael Lewis’s “The Big Short,” Mr. Hubler infamously bet against the subprime market on Morgan Stanley’s behalf, a fact that Morgan Stanley’s chief financial officer conceded in late 2007. Mr. Hubler’s group was supposed to be separate from the rest of Morgan Stanley, but the two bankers continued to receive similar information about the underlying market, according to a person briefed on the matter.

At no point did they receive material, nonpublic information, a Morgan Stanley spokesman says.

I struggle to see how the private assessments that the subprime market was imploding were immaterial.

Another of Morgan Stanley’s main defenses is that it couldn’t have thought the investment it sold to the Taiwanese was terrible because it, too, lost money on securities backed by subprime mortgages. As the Morgan Stanley spokesman put it, “This deal must be viewed in the context of a significant write-down for Morgan Stanley in 2007, when the firm recorded huge losses in its public securities filings related to other subprime C.D.O. positions.”

This is a common refrain offered by big banks like Citigroup, Merrill Lynch and Bear Stearns to absolve them of any responsibility.

But does losing money wipe away sin?

Yes, Mr. Hubler made his bets in what turned out to be a deeply disastrous way. As part of a complex array of trades, he bet against the middle slices of subprime mortgage C.D.O.’s. He bought the supposedly safe top parts. The income from the top slices helped offset the cost of betting against the middle slices. But when the market collapsed, the top slices — called “super senior” because they were supposedly safer than Triple A — didn’t hold their value, losing billions for Mr. Hubler and Morgan Stanley. Mr. Hubler did not respond to requests for comment.

So Morgan Stanley lost a great deal of money.

But let’s review what the documents suggest is the big picture.

In the fall of 2005, bank employees shared nonpublic assessments of how the subprime market was a house of tarot cards.

In February 2006, the bank began creating Stack in part so that it could bet against it.

In April 2006, the bank created its own internal hedge fund, led by Mr. Hubler, who shorted the subprime market. Among the traders in this internal shop were people who helped create Stack and other deals like it, and at least two employees who had access to the private due diligence reports.

Mr. Hubler’s group had no investment position in Stack, according to the person briefed on the matter, but it sure looks as if the bank saw what was coming and tried to position itself for a subprime market collapse.

Finally, by early 2007, the bank appeared to realize that the subprime market was faring even worse than it expected. Even the supposedly safe pieces of C.D.O.’s that it owned, including its piece of Stack, were facing losses. So Morgan Stanley bankers set to scouring the world to peddle as a safe and sound investment what its own employees were internally deriding.

Morgan Stanley declined to comment on whether it made money on its Stack investments over all. But it looks to have turned out well for the bank. In Stack, it managed to fob off a nuclear bomb to the Taiwanese bank.

Unfortunately for Morgan Stanley, it had so many other pieces of C.D.O.’s, so many nuclear warheads, that it couldn’t find nearly enough suckers around the world to buy them all.

And so when the real collapse came, Morgan Stanley was left with billions of dollars in losses.

That hardly seems exculpatory.

Article source: http://dealbook.nytimes.com/2013/01/23/financial-crisis-lawsuit-suggests-bad-behavior-at-morgan-stanley/?partner=rss&emc=rss

New York Attorney General Moves to Block Mortgage Settlement

The New York attorney general is moving to block a proposed $8.5 billion settlement struck in June by Bank of New York Mellon and Bank of America over troubled loan pools issued by Countrywide. A lawsuit filed late Thursday accuses Bank of New York of fraud in its role as trustee overseeing the pools for investors.

In papers filed in New York State Supreme Court, lawyers for Eric T. Schneiderman, the attorney general, contended that Bank of New York misled investors about its conduct as overseer of the securities. The bank also breached its duties to investors by agreeing to the deal with Bank of America, according to the complaint, because the trustee is conflicted and “stands to receive direct financial benefits” as a result of the agreement.

Questioning the fairness of the deal, the attorney general’s lawsuit said that it could “compromise investors’ claims in exchange for a payment representing a fraction of the losses” that have been suffered by investors.

When the terms of the deal emerged, they appeared to be quite favorable to Bank of America. On June 29, when the deal was announced, Bank of America’s shares closed with a gain of almost 3 percent.

A spokesman for Mr. Schneiderman declined to comment. Jeep Bryant, a spokesman for Bank of New York Mellon, disputed the attorney general’s allegations, calling them “outrageous, baseless, unsupported by fact and law” and saying that the bank would fight them in court. “We are confident that we have fulfilled in all respects our responsibilities as trustee,” he said, adding that Mr. Schneiderman’s action fails to understand the “benefit the settlement would provide to investors.” 

Bank of America purchased Countrywide in a distress sale in early 2008.

A judge overseeing the settlement will ultimately decide whether it should be approved. A court hearing on the proposed settlement was scheduled to take place Friday. Mr. Schneiderman’s lawsuit is likely to change the nature of those discussions.  

As announced by Bank of New York, which is overseeing 530 mortgage pools issued by Countrywide, the deal would require Bank of America to pay $8.5 billion to investors holding the securities. The unpaid principal amount of the mortgages remaining in the pools totaled $174 billion. Lawyers representing 22 institutional investors, including the Federal Reserve Bank of New York, BlackRock and Pimco, contended the deal was favorable.

But other investors in the Countrywide pools who were not part of the settlement negotiations between Bank of New York and Bank of America complained that the terms were inadequate. Among the criticisms made by a group of investors known as Walnut Place were that the negotiations were conducted in secret and that Bank of New York was conflicted as a negotiator because Bank of America agreed to cover all its costs and liabilities relating to the deal.

Mr. Schneiderman’s contention that Bank of New York breached its duties to investors is significant because a trustee that agrees to oversee loan pools like those issued by Countrywide must abide by the rules governing the securities. Such rules require that lenders deliver to the trust complete and original mortgage documents for each loan in a pool, for example, and require that the trustee notify investors when such loan documents are missing.

Bank of New York led investors in the Countrywide pools to believe that the lender had in fact delivered complete and adequate mortgage files for each loan as was required, the lawsuit said. The bank also misled investors by confirming that loan files relating to hundreds of thousands of mortgages were complete.

But the bank failed in these duties, the attorney general’s complaint said. After conducting a review of court records in the Bronx and Westchester County, Mr. Schneiderman’s investigators have determined that Bank of New York did not ensure that notes underlying properties were delivered properly to some trusts, according to the lawsuit. If loan documents were not delivered as required to the trustee, investors could recover the money they invested in the mortgages.

“Investors in the trusts were misled by Bank of New York Mellon into believing that Bank of New York Mellon would review the loan files for the mortgages securing their investment, and that any deficiencies would be cured,” the lawsuit said.

Article source: http://feeds.nytimes.com/click.phdo?i=7c23950f186d305e39598a83dbadf7b7

Charges Against Strauss-Kahn Dismissed

Prosecutors in the office of Cyrus R. Vance Jr., the Manhattan district attorney, told the judge, Michael J. Obus of State Supreme Court, that they could not prove the case beyond a reasonable doubt because of serious credibility issues with the hotel housekeeper who had accused Mr. Strauss-Kahn of sexually assaulting her as she entered his suite to clean it.

The judge initially had issued a stay on his decision until an appellate court could hear the housekeeper’s motion to remove Mr. Vance and appoint a special prosecutor. The appeals court denied the request, concurring with Justice Obus that the argument had no legal basis.

Justice Obus’s order of dismissal brought some semblance of vindication to Mr. Strauss-Kahn, 62, after his stunning arrest more than three months ago. He was taken into custody May 14 aboard an Air France jet at Kennedy International Airport and then paraded before news cameras, disheveled and in handcuffs.

For his accuser, Nafissatou Diallo, a 33-year-old Guinean immigrant, the result caps a precipitous fall. Prosecutors initially portrayed her as a credible and powerful witness, only to say that her myriad lies about her past — which included a convincing, emotional but ultimately fraudulent account of being gang raped by soldiers in Guinea — ended up undermining the case.

Ms. Diallo, who has made her identity public, still has a civil lawsuit pending against Mr. Strauss-Kahn for unspecified monetary damages, and her lawyer, Kenneth P. Thompson, has been relentless in his assertion that Mr. Strauss-Kahn sexually assaulted his client and that Mr. Vance’s office abandoned the case too soon.

Mr. Thompson made one last desperate attempt to keep the criminal case going, filing a motion on Monday asking that Mr. Vance’s office be disqualified. But about an hour before Tuesday’s hearing started, a court clerk handed out a one-page decision in which Justice Obus denied Mr. Thompson’s motion. However, Mr. Thompson appealed, leading to Justice Obus’s suspension of his dismissal order.

The appellate division’s ruling was expected to set the stage for Mr. Strauss-Kahn’s eventual return to France, where he is a leading figure in the Socialist Party and had been considered a top candidate for the French presidency.

After the hearing, Mr. Strauss-Kahn issued a statement, characterizing the time since his arrest as “a nightmare for me and my family,” and thanking the judge, his wife and family and other supporters.

He added that he was “obviously gratified that the district attorney agreed with my lawyers that this case had to be dismissed.”

“We appreciate his professionalism and that of the people who were involved in that decision,” he continued. Mr. Strauss-Kahn added that he looked forward to “returning to our home and resuming something of a more normal life.”

The case has attracted international attention ever since the arrest; each appearance in court has drawn a carnival-like atmosphere outside, with journalists and camera crews mixing with protesters. The scene on Tuesday was no exception: Well before Mr. Strauss-Kahn arrived at 11:03 a.m., about three dozen protesters gathered, most of them in opposition to Mr. Strauss-Kahn.

To them, the case represented an instance of a powerful, wealthy man getting away with something he did to a poor immigrant woman.

But his lawyers, Benjamin Brafman and William W. Taylor III, have maintained that the sexual encounter between him and Ms. Diallo was consensual and that she was simply trying to exploit him for money.

“You can engage in inappropriate behavior perhaps,” Mr. Brafman said outside the courthouse after the hearing. “But that is much different than a crime.”

Mr. Brafman and Mr. Taylor each characterized Mr. Vance’s decision to drop the charges in such a high-profile case as “courageous.”

But Mr. Thompson, Ms. Diallo’s lawyer, said Mr. Vance not only “abandoned an innocent woman,” he also made it less enticing for other women to come forward with claims of sexual assault.

On Monday, prosecutors laid out their reasons for asking that the case be dismissed in a 25-page report that concluded that Ms. Diallo could not be believed.

Colin Moynihan and William K. Rashbaum contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=1843b5b7af123fd6565be7ad42cfd387

City Room: Strauss-Kahn Pleads Not Guilty

Dominique Strauss-KahnMichael Appleton for The New York TimesDominique Strauss-Kahn, second from left, the former managing director of the International Monetary Fund, arriving at Manhattan Criminal Court.

Updated 10:55 a.m. | Dominique Strauss-Kahn, the former managing director of the International Monetary Fund, pleaded not guilty on Monday to charges that he sexually assaulted a hotel housekeeper.

In doing so, Mr. Strauss-Kahn uttered his first public words since the episode in the Sofitel New York, saying “not guilty” in a heavy French accent — setting the stage for a criminal trial in which Mr. Strauss-Kahn is expected to face his accuser.

Indeed, a lawyer for the housekeeper said on Monday that the woman intends to testify against Mr. Strauss-Kahn.

“She is going to come into this courthouse, get on that witness stand and tell the world what Dominique Strauss-Kahn did to her,” said Kenneth P. Thompson, the lead counsel for the woman.

Recreating an Encounter


An interactive diagram of the alleged assault.

The arraignment in Manhattan Criminal Court lasted all of four minutes, and proceeded as expected: Mr. Strauss-Kahn was formally charged in State Supreme Court in Manhattan on allegations that he tried to rape the 32-year-old room attendant at the Sofitel. Prosecutors also accuse him of forcing her to perform oral sex. The defense has indicated that it will argue that any sexual encounter was consensual.

“Once the evidence is reviewed it will be clear that there was no element of forcible compulsion whatsoever, any evidence to the contrary is simply not credible,” said Benjamin Brafman, one of Mr. Strauss-Kahn’s lawyers.

The frenzied interest in his case continued on Monday, with scores of reporters and camera crews stationed in the courtroom, outside the courthouse and even outside the townhouse in Lower Manhattan where Mr. Strauss-Kahn has been under house arrest.

As he arrived at the courthouse shortly before 9 a.m., witnesses said that protesters from a hotel housekeepers’ union yelled, “Shame on you!”

For the past few weeks, Mr. Strauss-Kahn has been staying a few blocks from the courthouse at 100 Centre Street in a multimillion-dollar luxury townhouse. He is under house arrest, wearing an electronic ankle monitoring bracelet, and can leave only under limited circumstances, such as to visit his lawyers or go to religious services.

Even from the 13th-floor courtroom, chanting could be heard from the demonstrators on the street.

When he entered the building, Mr. Strauss-Kahn was taken to a waiting area behind closed doors, where he stayed until the proceeding started.

About 9 a.m., the prosecutors on the case, Joan Illuzzi-Orbon and Artie McConnell, entered the courtroom, where about 100 members of the news media were already seated.

About five minutes later, one of Mr. Strauss-Kahn’s lawyers, William W. Taylor III, came in from the back, smiled and shook the prosecutors’ hands. They had had a brief conversation before Mr. Taylor returned to the back.

A short time after that, Mr. Thompson, the lawyer for the accuser, entered the courtroom and took a seat in the front row with two others.

At 9:15 a.m., Mr. Strauss-Kahn’s wife and his lawyers, including Mr. Brafman, entered the courtroom from a back room.

At 9:17, Mr. Strauss-Kahn entered the courtroom from a side door, expressionless with a dark suit and blue tie.

At 9:22, the judge handling the case, Michael J. Obus, took the bench to start the proceeding.

Mr. Strauss-Kahn’s next court date is July 18.

The arraignment of Mr. Strauss-Kahn, who many thought might be France’s next president, was covered live in special editions on many French television channels. The arraignment was live on the two main French channels, TF1 and France 2, on the domestic news cable channels and on France24, which broadcasts in French, English and Arabic.

“He pleaded not guilty,” Mr. Brafman said after the arraignment. “That is a very eloquent, powerful statement that he made that denies the charges.”

Article source: http://feeds.nytimes.com/click.phdo?i=0c5ffcdb9a334d3b08573e6f1a11f394

Bail Granted to Ex-I.M.F. Chief in Assault Case

Mr. Strauss-Kahn’s lawyers filed a new application for his release in State Supreme Court on Wednesday night, reiterating their client’s earlier offer to put up $1 million cash bail and wear an ankle monitor. The new application also said that Mr. Strauss-Kahn would remain under 24-hour home confinement in the apartment recently rented by his wife, with an armed guard posted outside — presumably to ensure he stays inside. He also submitted a waiver of extradition, should the American authorities need to get him back from France.

The judge, Justice Michael J. Obus of State Supreme Court in Manhattan, agreed to those conditions, also requiring $5 million bond to be posted.

After setting Mr. Strauss-Kahn’s bail conditions, Justice Obus issued him a stern warning.

“Mr. Strauss-Kahn, I assume you’re going to be posting this in due course,” he said. “You will be subject to and you will have the benefit of the protection of the criminal court system, the criminal justice system of this state and this country. I expect you will be here.”

If there is the “slightest problem with your compliance,” Justice Obus added, he could change the conditions of the bail and could even withdraw it.

Before the judge gave his decision, prosecutors announced that a grand jury indicted Mr. Strauss-Kahn on charges related to the alleged sexual assault of a hotel housekeeper at the Sofitel New York.

The charges included several first-degree felony counts, including committing a criminal sex act, attempted rape and sexual abuse; the most serious charges carry 25-year prison terms.

Mr. Strauss-Kahn was placed in protective custody on Rikers Island after his arraignment on Monday; he has since been placed under suicide watch for precautionary reasons.

Mr. Strauss-Kahn was escorted into the courtroom at about 2:30 p.m., looking much better than he had in his previous court appearance. He wore a gray suit with a baby blue shirt and was clean-shaven. He gave a toothless grin and nod to his wife, Anne Sinclair, and daughter, Camille Strauss-Kahn, who were sitting in the front row.

Reporters started lining up outside the courtroom more than two hours before the start of the hearing. About 100 of them squeezed inside the courtroom, some even sitting in the jury box alongside sketch artists and photographers.

There was some rumbling around 2:15 when Ms. Sinclair, strode into the courtroom, clutching her daughter’s hand. Ms. Sinclair wore a gray dress with a dark blazer, and cocoa-colored, patent leather platform heels.

In a sign, perhaps, of the seriousness with which prosecutors are treating the case, Artie McConnell, the assistant district attorney assigned to the case, was accompanied by Daniel R. Alonso, the chief assistant district attorney, and Lisa Friel, the chief of the office’s sex crimes unit.

Mr. McConnell began by reiterating the prosecution’s objection to bail being set. As he had argued during the Criminal Court arraignment on Monday, Mr. McConnell said that the evidence against Mr. Strauss-Kahn was compelling and that he had the means to flee.

“He has the stature and the resources not to be a fugitive on the run,” Mr. McConnell said, but to “live a life of ease and comfort in parts of the world that are beyond” the jurisdiction of the court and the United States.

Even though Mr. Strauss-Kahn said he had lunch with a family member, Mr. McConnell said his exit from the hotel was “unusually hasty.”

The prosecutor added that Mr. Strauss-Kahn “has shown a propensity for impulsive criminal conduct.” Mr. Strauss-Kahn gently shook his head in response.

This article has been revised to reflect the following correction:

Correction: May 19, 2011

Due to an editing error, the Web summary in an earlier version of this article referred incorrectly to the timing of the indictment. It was handed up on Thursday, not Friday.

Article source: http://feeds.nytimes.com/click.phdo?i=ce771e144156a5443db803db58192d3e