United States Third Circuit

In a criminal prosecution of corporate executives at the pharmaceutical giant Bristol-Myers Squibb for securities fraud under 15 U.S.C. section 78j(b) and Securities and Exchange Commission Rule 10b-5, the district court's pretrial order (1) dismissing the government's theories of omission liability under Rule 10b-5 that attempted to hold defendant accountable for omissions in quarterly SEC 10-Q filings based on alleged misstatements in a company's quarterly conference calls; and 2) excluding the government's expert, following a Daubert hearing, who would have testified to the company's stock price drop as evidence of Rule 10b-5's materiality element, the order is affirmed where: 1) defendant had no duty to disclose in SEC filings deriving from a general fiduciary obligation of "high corporate executives" to the company's shareholders; 2) there were no actionable omissions in the SEC filings on which to base the government's theory; and 3) the district court's thoroughly explained ruling that allowed the government to present its fact witnesses at trial, and then petition the court for introduction of an expert's stock price drop testimony, was a pragmatic solution and not an abuse of discretion.

Appellate Information

• Argued 05/11/2009
• Decided 04/07/2010
• Published 04/07/2010

Judges

• Before: AMBRO, ROTH and ALARCÓN , Circuit Judges.

Court

• United States Third Circuit

Counsel

• For Appellant:
  
• Paul J. Fishman, United States Attorney, Ralph J. Marra, Jr., Acting United States Attorney, George S. Leone, (Argued), Chief, Appeals Division Office of United States Attorney, Newark, NJ, for Appellant.


• For Appellees:
  
• Steven R. Glaser, Esquire, Lawrence S. Spiegel, Esquire, David M. Zornow, Esquire, (Argued), Skadden, Arps, Slate, Meagher & Flom Four Times Square, New York, NY, for Appellee., Roberto M. Braceras, Esquire, Goodwin Procter, Boston, MA, Richard M. Strassberg, Esquire, Maria Amelia Calaf, Esquire, Goodwin Procter, New York, NY, for Amicus Appellee.