That would be Frederick Schiff, who is scheduled to go on trial today on two felony counts of conspiracy and securites fraud for his role in an alleged channel stuffing scheme to inflate the drugmaker’s earnings between 2000 and 2002. Last week, US District Court Judge Faith Hochberg greatly narrowed the scope of his liability, Financial Week* reports.

She decided that Schiff can’t be held liable for failing to issue clarifying statements in filings with the Securities and Exchange Commission that have might have clarified false or misleading statements about financial reports in separate forums, such as analyst calls, the mag writes. Rather than explicit accounting violations, the government’s case now rests on Schiff’s “misstatements” in SEC filings and his “omissions to state” facts that would have rectified the misstatements.

You may recall that Schiff was indicated in April 2005, along with former exec vp Rick Lane, who ran the drugmaker’s pharma operations. The indictment charged them with concealing a scheme to meet revenue goals by offering incentives to wholesalers to carry larger inventories of its drugs. His attorneys plan to argue that this is not “channel-stuffing,” but rather a business strategy for “selling ahead of demand,” and that this is common in the pharmaceutical industry, according to a person familiar with the defense’s case, Financial Week reports.

The case drew a lot of attention on pharma’s bookkeeping practices. US Attorney Christopher Christie publicly branded Schiff a “chief concealment officer,” the mag reminds us. In June 2005, Bristol-Myers agreed to a $300 million settlement in connection with the case, as part of its own deferred-prosecution agreement with the government.

The misstatements in question include some 100 conference calls Bristol-Myers managers engaged in with Wall Street analysts prior to SEC filings, in which revenue recognition policies were discussed. The government is seeking to argue that Schiff “omitted” corrections to misstatements made during these discussions in subsequent SEC filings, and that these separate acts are all “of a piece.”

In her opinion last week, Hochberg wrote: “None of the (legal precedents) stands for the theory that a defendant has a duty to speak in SEC filings based on prior statements made in some other context…there must be a (circumstantially) connected statement to which the alleged misstatement relates. There is no fair connection here between the analyst conference call and the MD&A section of the SEC filing.”

She did give the government permission to pursue its case against him on its theories of conspiracy, misrepresentation, aiding and abetting, and “scheme” liability on both counts in the indictment. Attorneys for Schiff and the US Attorney’s office declined to comment, Financial Week writes.

* subscription may be required