Friday, August 4, 2006

The Split Verdict in the Trader's Case

More can be found here and here on the jury's decision in the Houston Trader's Case.  The former trader from Dynergy was found guilty of seven counts of wire fraud and the former El Paso trader has one wire fraud count conviction. Some of the remaining counts were not guilty findings, and some were hung. Some questions:

  • Were the wire fraud counts premised on "money or property" or on section 1346? If 1346, the "honest services" provision, will it hold up after the recent 5th Circuit's recent ruling in the Enron Barge/Merrill Lynch case? (see post here)
  • Without the false reporting, what was the scheme to defraud?  Is this just a compromise verdict and how will an appellate court look at this?
  • Would it be wise for the defendants to reach some agreement with the prosecution to avoid a retrial on the counts that were hung? And would it be wise for the government to agree in light of the recent 5th Circuit decision?
  • This is yet another case where an individual accused of a white collar crime is admitting to doing an act, but claiming they didn't know it was illegal. It is another case of someone not realizing what is criminal and what is not.  With overfederalization and overcriminalization, it is likely that cases like this could continue to rise.  Due process requires notice, and perhaps the unawareness will give rise to an appellate issue claiming a denial of due process.  Should ignorance of the law be a legitimate excuse in the white collar case? (see the cases of Ratzlaf and Cheek).

Tom Kirkendall of Houston ClearThinkers points out here that the defense did not put on a case.  If there is a retrial, and it is on just the limited remaining count/s then the accused will be in the position of presenting new material to the jury that has not previously been cross-examined. However, with the conspiracy count remaining, the breadth of evidence that would be admissible is increased.

(esp)

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