Former Bank of America Corp. (BAC) broker Theodore Sihpol (search), acquitted last month on most counts of helping a hedge fund trade mutual funds illegally, will be retried on four counts on which the jury deadlocked, lawyers in the case said on Thursday.

Justice James Yates of New York State Supreme Court set an Aug. 22 date for a new trial, which is expected to last four to five weeks.

Prosecutors had accused Sihpol of helping the Canary Capital Partners LLC (search) hedge fund trade mutual funds as late as 6:30 p.m. and yet still get the 4 p.m. price, known as "late trading." This helped Canary generate market-beating returns by using late-breaking news to make profits or avoid losses.

Jurors on June 9 acquitted Sihpol of seven counts of grand larceny and 22 other counts, after a nearly six-week trial and six days of deliberations.

The verdict was a defeat for New York Attorney General Eliot Spitzer (search), in his first trial stemming from his probes into Wall Street stock research, mutual funds and insurance.

The jury deadlocked on one count each of fraud and scheming to defraud, and two counts of falsifying business records. Sihpol, 37, faces up to four years in prison on each remaining count.

"I think it is an odd response under those circumstances to bring a new trial," said Paul Shechtman, a lawyer for Sihpol. "My guess is most prosecutors' offices would not have followed this course." Shechtman said he learned Wednesday night of the decision to retry his client.

Lead prosecutor Harold Wilson, an assistant New York attorney general, declined to discuss the retrial. Marc Violette, a spokesman for Spitzer, declined immediate comment.

Sihpol's lawyers had argued that their client at the time thought Canary's trades were proper, made no attempt to conceal them and had no criminal intent.

Ron Geffner, a partner at Sadis & Goldberg LLC in New York, said a conviction might encourage other prospective defendants to settle with Spitzer, because it would "impose a fear that Spitzer will prosecute them to the fullest extent."

Spitzer has accused American International Group Inc. (AIG) and former chief executive Maurice "Hank" Greenberg in a lawsuit of accounting fraud, and is suing former New York Stock ExchangeChairman Richard Grasso over his pay package.

The defense plans to file a motion asking Yates to exclude matters on which the first jury acquitted Sihpol. A hearing is set for Aug. 15.

If the motion is successful, Shechtman said the prosecution's case might "look like Swiss cheese, because it will have so many evidentiary holes."

Charlotte, N.C.-based Bank of America agreed to pay $675 million to settle regulatory charges over its mutual fund practices, and Canary settled with Spitzer for $40 million. Neither admitted wrongdoing.

Canary was led by Edward Stern, whose billionaire father Leonard ran Hartz Mountain Corp (search).