Source: cases/15usc78j/f3d-929-63-united-states-v-afriyie.case
Case source: https://www.neochart.com/catalog/cases/f3d/volume_929/0063_01/index.html
Under Chestman , "a person violates [ 17 C.F.R. § 240.10b-5 ] when he misappropriates material nonpublic information in breach of a fiduciary duty or similar relationship of trust and confidence and uses that information in a securities transaction."
Accordingly, any error in the district court's instruction did not result in prejudice; viewing the charge actually given as a whole, see United States v. Feliciano , 223 F.3d 102, 116 (2d Cir. 2000), the outcome of the trial would have been the same had Afriyie received the instruction he sought.
There was therefore no error in the district court's good faith instruction.
casedsl 1 case /f3d/929/0063-01 name United States v. Afriyie cite 929 F.3d 63 (2019) court United States Court of Appeals for the Second Circuit date 2019-07-08 url catalog/cases/f3d/volume_929/0063_01/index.html source ir/caselaw/f3d_929.jsonl sha1=161ad503eeeb2cee7291dce6c63862d188ad761a chars=31266 law 15usc78j role rule-announced posture criminal insider trading; conviction affirmed after plain-error jury-instruction review; separate restitution remand result mixed element scheme : not-reached scope procedural count Count One securities fraud variant insider-misappropriation/employment-confidentiality fact @2322..3047 [supports] | The next morning, on January 28, Afriyie accessed the ADT and Apollo research folders on MSD's shared drive. After doing so, he purchased his first ADT call option. That afternoon, MSD added ADT to its list of "restricted" securities, and Afriyie received an email to this effect. Taken together, the restriction emails Afriyie received informed him that Apollo was planning to acquire ADT. The next day, Afriyie purchased an additional 35 ADT call options. On February 2, although he was not assigned to work on the ADT project, Afriyie accessed documents specific to the Apollo-ADT deal stored on MSD's shared drive. He subsequently purchased over 2,000 additional ADT call options over the course of the ensuing two weeks. fact @7928..8037 [supports] | Afriyie does not dispute that on his first day of employment with MSD, he signed a confidentiality agreement. rule @5947..6197 | Under Chestman , "a person violates [ 17 C.F.R. § 240.10b-5 ] when he misappropriates material nonpublic information in breach of a fiduciary duty or similar relationship of trust and confidence and uses that information in a securities transaction." held @8359..8657 | Accordingly, any error in the district court's instruction did not result in prejudice; viewing the charge actually given as a whole, see United States v. Feliciano , 223 F.3d 102, 116 (2d Cir. 2000), the outcome of the trial would have been the same had Afriyie received the instruction he sought. gloss The confidentiality agreement defeats prejudice on the challenged duty instruction. The court does not newly decide sufficiency of every misappropriation element; the instruction ruling is not a merits instance. element willfulness : not-reached count Count One securities fraud variant criminal-instruction/burden-and-good-faith fact @3048..3479 [supports] | On February 16, Apollo publicly announced its planned acquisition of ADT. ADT's stock price rose by 47.5%, and the value of Afriyie's investment in ADT call options increased by 6,000% in one day. Over the course of the following week, Afriyie sold his options for a total profit of $1,564,071.60. In late February and March 2016, he wired a portion of the proceeds out of his brokerage account and into a separate savings account. rule @9094..9480 [quoted] | If the government proves beyond a reasonable doubt ... that the defendant engaged in an insider trading scheme, it must then prove that the defendant engaged in that scheme knowingly, willfully, and with intent to defraud MSD Capital .... It is for you to determine whether the government has established beyond a reasonable doubt such knowledge and intent on the part of the defendant. rule @9481..9916 [quoted] | Because an essential element of the crime charged is intent to defraud, good faith on the part of the defendant is a complete defense to the charge of insider trading. That is, the law is not violated if the defendant held an honest belief that his acts were proper and not [in] furtherance of any unlawful scheme. A person who acts on a belief or reason honestly held that turns out to be wrong is not punishable under these statutes. held @10670..10746 | There was therefore no error in the district court's good faith instruction. gloss The affirmed instruction leaves proof of knowing, willful, intentional fraud beyond reasonable doubt with the government. No finding that civil recklessness alone proves criminal willfulness is encoded. misfit Instruction review combines rule selection with a procedural no-prejudice application. Procedural scope is used for the harmlessness block; the willfulness rule remains not-reached despite affirmance of the conviction. Result mixed includes the separate restitution remand, not acquittal on securities fraud.