United States v. Binette
2011 U.S. Dist. LEXIS 141983
| D. Mass. | 2011Background
- Binette is charged with insider trading and obstruction of justice (Count VII) under 18 U.S.C. § 1512(c)(2).
- Count VII alleges Binette corruptedly obstructed an official proceeding.
- The SEC conducted a preliminary investigation into Safeco trading and questioned Binette by telephone at his workplace.
- Binette and his uncle Talbot allegedly profited by exercising options on Safeco stock after Safeco’s acquisition was rumored/announced.
- Binette initially told the SEC he had no other sources and had learned of Safeco from the internet and a dream, later admitting those statements were false.
- The court analyzes whether the SEC’s preliminary investigation constitutes an “official proceeding” under § 1512(c)(2) and grants the motion to dismiss Count VII.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a SEC preliminary investigation qualifies as an official proceeding under §1512(c)(2). | Government argues preliminary investigations can be official proceedings under the statute. | Binette contends only formal investigations with subpoenas and oaths count as official proceedings. | Not an official proceeding; count dismissed. |
Key Cases Cited
- United States v. Ramos, 537 F.3d 439 (5th Cir. 2008) (limits 'official proceeding' to formal agency convocation)
- United States v. Kelley, 36 F.3d 1118 (D.C. Cir. 1994) (investigations with subpoenas and oaths are formal)
- United States v. Batten, 226 F. Supp. 492 (D.C. D.C. 1964) (influences the formal investigation framework)
- United States v. Santos, 553 U.S. 507 (2008) (plurality on interpretive lenity guidance for ambiguous laws)
- Arthur Andersen LLP v. United States, 544 U.S. 696 (S. Ct. 2005) (context for official proceedings and SEC investigations)