BRADENTON, Fla. – The federal judge overseeing the case against former JPMorgan bankers Charles LeCroy and Douglas MacFaddin has denied the Security and Exchange Commission’s request to set a trial date.

The bankers, who face pay-to-play charges related to municipal bond and swap transactions with bankrupt Jefferson County, Ala., said they would be at a disadvantage without being able to depose CDR Financial Products Inc. senior vice president Douglas Goldberg, and the judge agreed Friday.

Judge Abdul Kallon said he had to weigh competing interests in deciding whether to continue to delay the case.

The “potential miscarriage of justice to defendants LeCroy and MacFaddin” from proceeding without Goldberg’s testimony favors continuing the stay on taking a deposition from Goldberg until April 1, after Goldberg is sentenced in an unrelated case, in which he pleaded guilty to participating in a conspiracy to rig bids for municipal bond investment contracts. His sentencing is currently set for March 20, 2014.

CDR was the swap adviser to Jefferson County as it built a portfolio of derivatives during the issuance of nearly $3.2 billion of auction- and variable-rate sewer warrants sold to rebuild an aging regional sewer system under a federal consent decree.

The SEC, which previously agreed with delaying the 2009 case against the JPMorgan bankers, asked the judge to set trial in February 2014 without deposing Goldberg saying that 31 depositions had been taken and “hundreds of thousands of documents” exchanged in the discovery process.

LeCroy and MacFaddin, who said Goldberg’s testimony is critical, have been charged with making more than $8 million in undisclosed payments to close friends of certain Jefferson County commissioners and broker-dealers to ensure that JPMorgan would be selected as managing underwriter of Jefferson County’s sewer deals, and that the firm’s affiliated bank would be chosen as the main swap counterparty.

The SEC brought suit against the two bankers shortly after settling securities fraud charges with JPMorgan.

Without admitting or denying the SEC’s charges, the investment bank agreed to pay $75 million in penalties and to forfeit more then $647 million of claimed swap termination fees. The $75 million in penalties was collected by Jefferson County.

Last week, Jefferson County’s attorneys announced a plan support agreement with 78% of the creditors holding $3.1 billion in defaulted sewer system warrants that is expected to help the county exit bankruptcy by mid-December.

In that agreement, JPMorgan approved redistributing all but about 20% of its $1.218 billion holdings so that other sewer system creditors on average could recover about 80 cents on the dollar.

In the LeCroy and MacFaddin case, the judge has set a deadline of Oct. 7 for the bankers to file summary judgment motions concerning the statute of limitations or jurisdiction over the relevant swap transactions. The SEC must reply to the motions, if any are filed, by Nov. 18.

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