LOS ANGELES - A jury yesterday decided that an article published two years ago in California Municipal Bond Advisor, a Palm Springs, Calif.-based monthly newsletter, did not libel College Savings Bank of Princeton, N.J.

After three hours of deliberation, jurors voted 9 to 3 that an Oct. 1, 1991 newsletter article that derided the bank's college savings certificate of deposit product was not libelous. The panel's verdict followed a week-long trial in Los Angeles County Superior Court.

Peter A. Roberts, chairman of the bank, testified that the newsletter article contained "lies" and implied that bank officials were "crooks." The article concluded that the bank's "CollegeSure" CD was "an investment for the intellectually impaired."

Following the verdict, newsletter publisher Zane B. Mann said he asked his defense lawyer, Richard S.E. Johns of Kipperman & Johns, to prepare a "malicious prosecution suit" against Roberts, the bank, the plaintiffs law firm of Hufstedler, Kaus & Ettinger, and Shirley Hufstedler of the law firm, "in an effort to recover my legal fees and related expenses." Mann said he spent "several hundred thousand dollars" to defend against the "frivolous" suit.

Mann said he has also had medical and hospital expenses stemming from a stress-related "heart attack" since the libel suit was filed by College Savings Bank in February 1992. Mann said he suggested to his counsel that the suit seek $16 million in "actual and punitive" damages.

Discussing the case with jurors in the hallway outside the courtroom yesterday after the verdict, Mann said the legal proceedings were "horrible for me."

Mann said the jury's verdict upheld freedom of speech and of the press and assured that financial writers and analysts are free to express their opinions about investments "of doubtful value."

"There are a whole string of reporters across the country who say, ~there but for the grace of God, go I,'" Mann told jurors gathered around him.

Several jurors greeted Mann warmly. One juror said, "I would want him to advise me if I were to buy bonds." The juror said Mann did not libel the bank because "[the article] was his opinion. We are all entitled to our opinions."

However, one of three jurors who disagreed with the jury's decision said that she works for a financial institution and believed that the newsletter article "could be damaging" to College Savings Bank. Another juror who also disagreed with the decision said, "I just think it was a badly written article."

College Savings Bank's lawyer, Jerome Craig of Hufstedler, Kaus & Ettinger, said a turning point in the trial occurred last Friday when Judge David A. Workman ruled that the bank was a limited public official. The ruling placed a higher burden of proof on the bank to recover damages than if it were a private figure.

Workman said he reasoned that Roberts, the bank's chief executive officer, chose to step into the limelight when he bought advertisements in Newsweek and other national magazines; the ads lambasted college saver zero-coupon bonds.

"We think he was wrong [in the limited public figure ruling], but courts have wide discretion," Craig said. "We have not made any decision what the next step will be" in terms of further legal proceedings, he said.

In an interview after the verdict, Roberts indicated that testimony last Friday by state Treasurer Kathleen Brown may have helped Mann's case.

"The very popular State Treasurer had significant influence [on the jury]," Roberts said. "It was a case of a New Jersey corporation against a California individual. We would have preferred the venue to be out of California."

However, Johns, Mann's defense lawyer, said Roberts' counsel "chose where to file suit."

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