A spokesman for the United States Attorney has said that office is continuing its investigation of Sterling Foster.

Sterling Foster sold twice what was offered in the initial public offering.

Sterling Foster and several executives were indicted for securities fraud by a grand jury in the Southern District last fall.

But that was not where Sterling Foster made most of its money, according to the complaint.

The big bucks were generated once the stocks started trading and Sterling Foster controlled and dominated trading in these companies' shares.

Sterling Foster used these cheap shares to cover the sales it had made at the inflated market price, reaping profits of as much as $8.50 a share.

Prosecutors contend that he secretly created and controlled Sterling Foster and was part of a group that made $100 million off that operation.

Even when government pressure forced Sterling Foster to close in 1997, Mr. Bernstein still felt immune.

Prosecutors say that Sterling Foster manipulated the initial public offering of Embryo Development, which markets biomedical devices.

He then kicked back the proceeds from these sales indirectly to Sterling Foster, prosecutors said.