Securities & Exchange Commission v. Jasper, 678 F.3d 1116

Jasper was Maxim's CFO responsible for accounting; Maxim used backdated stock options from 2000–2005, restated in 2006 after investigations; the SEC alleged violations of securities laws based on the backdating scheme; the jury found in SEC's favor on most counts and the district court imposed injunctions, a two-year officer/director ban, a $360,000 penalty, and SOX 304 disgorgement of about $1.8 million; Jasper appealed on evidentiary, prosecutorial, and SOX 304 grounds.
Maxim disclosed restatements for 1997–2005 in 2008, reducing pre-tax income by hundreds of millions due to unrecorded option expenses; Jasper signed Maxim's filings during the relevant period; the internal investigation prompted resignations of Jasper and the CEO in 2007.
The case centers on stock options backdating, where the exercise price locked in gains and concealed expenses, potentially overstating income and misleading investors.
Jasper challenged three evidentiary rulings, a claim of prosecutorial misconduct, and the SOX 304 reimbursement remedy; the Ninth Circuit affirmed in all respects.
The opinion discusses admissibility of the 2006 restated 10-K as a business record, admissibility of Fifth Amendment adverse inferences, exclusion of Ruehle statements, and the nature of SOX 304 as equitable disgorgement not a jury-issues remedy.
The court concludes Jasper received a full and fair trial and affirms the judgment.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Admissibility of the 2006 restated 10-K	SEC urged admissibility as business record	Jasper argued it was hearsay and lacking trustworthiness	Admissible as business record; not abuse of discretion
Fifth Amendment adverse inferences	Jasper's invocations support adverse inferences	Discretion to tailor inference on a case-by-case basis	District court did not abuse discretion; total invocations support inference
Ruehle hearsay statements (804(b)(1))	Ruehle statements would exculpate Jasper	Unavailability and reliability concerns prevent admission	Exclusion upheld; deemed unreliable and unavailable cross-examined witness
Attorney misconduct in trial	SEC argued misconduct occurred in closing	Misconduct pervasive enough to taint verdict	No pervasive misconduct; no new trial required
SOX 304 reimbursement (disgorgement)	Restatement was due to misconduct; remedy appropriate	Jury should decide predicate facts; remedy is legal	SOX 304 is equitable disgorgement; no jury trial on predicate facts; affirmed

In re Digimarc Corp. Derivative Litig., 549 F.3d 1223 (9th Cir. 2008) (SOX 304 did not create private right of action; disgorgement is equitable)
Paddack v. Dave Christensen, Inc., 745 F.2d 1254 (9th Cir. 1984) (special-audit vs. financial-statement audit admissibility; business records)
Glanzer v. Nationwide Life Ins. Co., 541 F.3d 903 (9th Cir. 2008) (case-by-case balancing of Fifth Amendment adverse inferences in civil cases)
Baxter v. Palmigiano, 425 U.S. 308 (U.S. 1976) (Fifth Amendment adverse inferences in civil cases permissible)
United States v. Sioux, 362 F.3d 1241 (9th Cir. 2004) (plain-error review; level of objection and general inadmissibility)
Ernst & Young LLP v. N.M. State Inv. Council, 641 F.3d 1089 (9th Cir. 2011) (GAAP accounting treatment and backdating context)
United States v. Lester, 749 F.2d 1288 (9th Cir. 1984) (cross-examination considerations for hearsay exceptions)
United States v. Hicks, 217 F.3d 1038 (9th Cir. 2000) (summary-judgment-like framing for appellate review of trial record)