Opinions And Orders Of The United States Court Of Appeals

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OPINIONS AND ORDERS The opinion of the United States Court of Appeals for the Thirteenth Circuit. R. 22–30. The decision and order of the United States District Court, District of Wisteria denying Plaintiff’s Motion for a New Trial. R. 13–21. CONSTITUTIONAL AND STATUTORY PROVISIONS This case involves questions relating to Section 10(b) of the Securities and Exchange Act of 1983. 15 U.S.C. § 78j(b) (2012). It also involves issues related to the willfulness requirement in the penalties provision of the Securities and Exchange Act. 15 U.S.C. § 78ff(a) (2012). Finally, the case involves questions related to the hearsay exception for former testimony under the Federal Rules of Evidence. Fed. R. Evid. 804(b)(1). STATEMENT OF THE CASE…show more content…
R. 3. Abernethy told Bookwalter that it was a “nightmare, financially” and that he was only telling Bookwalter as a favor to him. R. 3. While Bookwalter did own iTech stock, he did work as a stock broker. R. 3–4. The Second and Third Tips After learning about iTech, Bookwalter approached Corinne Cuzick (“Cuzick”), a hedge fund manager and a close friend. R. 4. Bookwalter told Cuzik what Abernethy told him about iTech’s financial shortfall. R. 4. Cuzik asked why Abernethy would tell Bookwalter, and Bookwalter stated that he believed Abernethy was “looking out for family.” R. 4. After talking to Bookwalter, Cuzik executed a sell order on her sizable iTech stock. She then approached Dana DiNofrio (“DiNofrio”), a financial adviser and a friend. R. 4. Cuzik proceeded to tell DiNofrio that she had good information that iTech’s profits were poor. R. 5. While, DiNofrio did not know Abernethy and Bookwalter personally, she did know who they were and knew about their relationship. R. 4–5. The Monday after the party, DiNofrio sold her iTech stock as soon as the markets opened. R. 5. When iTech announced its earnings, its stock value fell by 20% within thirty minutes. R. 5. Cuzik averted a 2.1 million dollar loss for her hedge fund, while DiNofrio averted a loss of 3 million dollars. R.5 SEC and DOJ’s Investigations into the Tips Cuzik and DiNofrio’s trades were immediately flagged by computers at the Security Exchange Commission
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