555 F. App'x 98
2d Cir.2014Background
- Whitman convicted in SDNY of two conspiracy to commit securities fraud and two securities fraud counts; district court excluded certain expert testimony, a deposition, and corroborating testimony; district court gave specific jury instructions on conscious avoidance, personal benefit knowledge, fiduciary duty, and information significance; appellate review applied abuse of discretion standard and harmless error analysis; judgment affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of expert testimony | Government argued experts’ methodologies fit Rule 702 and gatekeeping standards. | Whitman contended broader, more flexible expert opinion was required. | District court did not abuse discretion; limits reasonable. |
| Unavailable witness rule 804(b)(1) deposition | Deposition offered as substitute for unavailable witness; motive differed. | Deposition should be admissible given similarity of motive. | District court did not abuse discretion; deposition excluded. |
| Excluded corroborating testimony | Whitman associate testimony would corroborate tone/demeanor. | Testimony would be prejudicial/irrelevant. | Exclusion harmless error; no prejudice. |
| Conscious avoidance instruction | Knowledge of tipper’s improper conduct could be inferred from circumstantial evidence. | Conscious avoidance not warranted by facts. | Proper to instruct; supported by record. |
| Knowledge of personal benefit and related instruction | Whitman must know insider’s breach in exchange for benefit; instruction proper. | Instruction flawed/ambiguous; proposed alternative standard. | Instruction consistent with circuit precedent; no error. |
Key Cases Cited
- United States v. Kozeny, 667 F.3d 122 (2d Cir. 2011) (conscious avoidance evidence may be circumstantial)
- United States v. Svoboda, 347 F.3d 471 (2d Cir. 2003) (circumstantial predicate for conscious avoidance conduct allowed)
- United States v. DiNapoli, 8 F.3d 909 (2d Cir. 1993) (prior testimony admissibility depends on motive similarity)
- Amorgianos v. Nat’l R.R. Passenger Corp., 303 F.3d 256 (2d Cir. 2002) (Rule 702 reliability factors for experts)
- Global-Tech Appliances, Inc. v. SEV S.A., 131 S. Ct. 2060 (2011) (conscious avoidance consistent with prior circuit law)