United States Second Circuit

Defendants' convictions for lying to clients about the nature and quality of certain investments are affirmed, but remanded for resentencing, where: 1) Section 10(b) of the Securities Exchange Act of 1934 and its implementing regulation, Rule 10b-5, do not apply to extraterritorial conduct, regardless of whether liability is sought criminally or civilly; 2) here, although the district court did not require proof of domestic securities transactions in this case, this unchallenged error was not "plain" since it did not affect the outcome of the proceedings, and therefore did not affect defendants' substantial rights; 2) reliance is not an element of a Section 10(b) offense, and thus, the district court did not err by not instructing the jury on the issue of reliance; 3) the district court's instruction permitting the jury to convict the defendants of mail fraud based on a mailing that itself contained no false or fraudulent statement did not "constructively amend" the indictment; 4) on remand, the district court must decide what acts constitute the offense conduct for the purposes of calculating the appropriate loss amount at sentencing, and re-determine the amount of money subject to forfeiture; and 5) the remaining claims are without merit.

Appellate Information

• Decided 08/30/2013
• Published 08/30/2013

Judges

• CARBANES

Court

• United States Second Circuit

Counsel