Reference no: EM131660899

Question: The government's initial theory, consistent with the indictment, was that Defendant read the e-mails when he arrived at work *** Monday morning, but there is no direct evidence that he did so. Defendant denied that he read the e-mails before placing his buy order and testified that he did not read them until 1:00 P.M., approximately 40 minutes after he made his purchase. During its cross-examination of Defendant, the government pursued what the parties refer to as the "office abuzz" theory. The government's questioning of Defendant suggested that because of the open cubicle configuration of the office, Defendant could not help but overhear conversations among his co-workers regarding the exciting news of the X-Box contract-that the office was "abuzz" with the news. Defendant denied that he overheard any X-Box office conversation. The district court overruled Defendant's objection that the government should not be allowed to argue the "office abuzz" theory because "there is no evidence in the record the company was abuzz with the news," as indeed there was not, as a basis of liability. This "office abuzz" theory of liability as to how Defendant acquired insider information, an essential element of the charged crime, is factually distinct from the theory charged in the indictment, that Defendant acquired the insider information through reading the companywide e-mails. Because it is a new, uncharged theory, Defendant had no notice of it and no opportunity to defend against it, to rebut it with his own evidence. One of the primary purposes of an indictment is to inform a defendant of what he is accused of doing in violation of the criminal law, so that he can prepare his defense. This purpose was not served here. Accordingly, I would conclude that the variance here affected Defendant's substantial rights and, thus, requires reversal.

1 LAW. What did the majority rule with respect to the dispute in this case? On what rationale did the majority base this ruling?

2 LAW. What was the dissent's position on the issue before the court? What were the dissent's reasons in support of its position?

3 ETHICS. When a case is tried before a jury, the jury determines the credibility of the witnesses, resolves conflicts in the evidence, and draws reasonable inferences from the facts. Is it appropriate for a prosecutor, as in this case, or a defendant to suggest an inference for the jury to make? Explain.

4 SOCIAL D IMENSIONS. Suppose that a corporate insider, without revealing any material, nonpublic information, advises a friend to buy stock in the company. Can the insider legitimately share the profit on the stock's sale? Why or why not?

5 IMPLICATIONS FOR THE INVESTOR. What does the outcome of this case suggest for the employee who wants to buy stock in her or his employer's firm on the basis of a potentially profitable development?