United States v. Callipari

United States Court of Appeals
For the First Circuit

No. 03-1647

UNITED STATES OF AMERICA,

Appellee,

v.

RICHARD P. CALLIPARI,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND

(Hon. Mary M. Lisi, U.S. District Judge)

Before

Selya, Circuit Judge,
Stahl, Senior Circuit Judge,
and Lynch, Circuit Judge.

Amy M. Baron-Evans, with whom Michael A. Collora, Michael B.
Galvin, and Dwyer & Collora LLP, were on brief for appellant.
Marc I. Osborne, United States Department of Justice, with
whom Craig N. Moore, United States Attorney, Peter A. Mullin,
Special Assistant United States Attorney, and Adam J. Bookbinder,
Special Assistant United States Attorney, were on brief for
appellee.

May 17, 2004
 STAHL, Senior Circuit Judge. A federal jury found

defendant-appellant Richard Callipari guilty of conspiracy to

commit wire fraud, in violation of 18 U.S.C. § 371 (Count One);

wire fraud, 18 U.S.C. § 1343 (Counts Two through Eleven); and

endeavoring to obstruct a Securities and Exchange Commission

proceeding, in violation of 18 U.S.C. § 1505 (Count Twelve). On

appeal from his conviction and sentence, Callipari contends that

the district court erred (1) in its instructions to the jury on

Counts One through Eleven; (2) in limiting cross-examination and

closing argument; (3) in its instructions to the jury on Count

Twelve; (4) in denying his motion for judgment of acquittal on

Count Twelve; and (5) in calculating the loss amount attributable

to him for sentencing purposes.

I. BACKGROUND

The following recitation of facts comes from an extensive

record composed primarily of trial testimony, recorded phone

conversations, and records of stock options trades conducted by

Callipari and his co-conspirator, Thomas Connolly. All are

described in a light most favorable to the verdict.

A. Callipari's tenure at Fidelity Investments

From December 1993 to April 7, 1997, Callipari was

employed by Fidelity Investments, a financial services firm

headquartered in Boston, as an equity trader. Callipari primarily

served broker/dealers, which are firms that do not have their own

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customers but trade their owners' money. Among these customers

were JAS Securities, Rockrimmon Securities, and Andover Securities.

During Callipari's time at Fidelity, Connolly was a Vice

President and trader on Fidelity's options desk. Callipari's

position at Fidelity was considered higher and more prestigious

than Connolly's. Connolly had a history of alcohol and drug abuse

and subsequent to the time of the offenses in this case, was

diagnosed with bipolar disorder. As an options trader, Connolly

bought and sold options on behalf of Fidelity customers. In

particular, he facilitated the execution of customer orders for

options trades by relaying these orders to the appropriate exchange

for execution, such as the Chicago Board of Options Exchange

(CBOE). Under Fidelity policies, he could take a "not held" order,

which gave him discretion over when to execute the order. His

customers, however, still had to approve which options were

actually traded.

Callipari and Connolly became friends during their tenure

at Fidelity and spoke regularly. Callipari introduced Connolly to

Richard Englander, who was a trader for Rockrimmon and later,

Andover. Callipari also encouraged his customers, including JAS,

to trade options through Connolly.

Before we proceed further with the narrative, we think it

important to provide some background on options trading. The

offenses involved trading in Standard & Poor's 100 options at the

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CBOE. The Standard & Poor's 100, generally known as OEX or OEW, is

an index of one hundred major stocks. There are two types of

options, calls and puts. The buyer of a call option is entitled to

receive a cash payment from the seller if the index closes above a

predetermined "strike price" on a specified expiration date. The

buyer of a put option receives a cash payment from the seller if

the index closes below the strike price on the expiration date.

For example, an "OEX Sep 900 call" is a call with a strike price of

900 and expires the third Friday of the September following the

sale. If the OEX closes higher than 900 on that day, the seller

pays the buyer the difference between 900 and the index, multiplied

by $100. If the index closes at or below 900 on the expiration

day, the buyer receives nothing.

Puts work in reverse. If the index closes below 900 on

the expiration date, the buyer receives the difference between the

closing value and 900, multiplied by $100. If the index closes at

or above the strike price, the buyer gets zero.

An options buyer is said to have a "long" position in

that option while the seller is said to have a "short" position.

The risk is greater in the latter because while the buyer risks

only the price of the option, the seller faces potentially

unlimited liability because in the case of a call the market can

rise to any level and for a put because the market can crash to as

far as zero. Because of these risks, brokerage firms typically

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require customers in "short" positions to deposit a cash margin

with the firm at the end of the day on which the option is sold in

order to hold the option open overnight. A trader with a short

position can eliminate his risk and minimize margin requirements by

buying back an equal number of the same options, what is called

"closing" the position. He can also reduce his risk by "hedging"

the short position by taking a long position in another option of

the same type (put or call), tied to the same index, but with a

different strike price.

A trade is made by contacting an executing firm.

Professional Trading and Research (PTR), located at the CBOE, is

one such firm. When a trader requests the services of a PTR clerk

in executing a trade, both the trader and the clerk fill out a

ticket recording information about the trade. In this case, at the

close of each business day, the PTR clerk, usually Anthony Srock,

and Connolly's supervisor, Catherine Curran, "recapped" the day's

trades over the phone to ensure that they matched.

Each options trader has a clearing house, like Fidelity,

that holds his options and cash. Fidelity can also fill a trade

order for a customer who clears his trades with another firm. In

such cases, Fidelity fills the order and sends the trade either (1)

to the Options Clearing Corporation (OCC) pursuant to a clearing

member trading agreement (CMTA), which delivers it to the

customer's clearing house, or (2) delivers it directly to the

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customer's clearing house in what is called a "give-up" trade. The

clearing house receiving a "give-up" can "don't-know" ("DK") a

trade and decline it, thereby placing the risk of any loss from the

trade on Fidelity. It is more difficult for a recipient firm to

decline a trade transferred through the OCC because firms that have

signed a CMTA with each other agree that they will not DK trades

sent to the other through the OCC.

In the summer of 1996, Connolly began to trade without

orders from a specific customer. He usually placed the orders with

Srock. Connolly, however, did not fill out the required tickets.

At Connolly's request, Srock did not recap these unauthorized

trades.

Connolly made these trades over the phone from Fidelity's

options desk, where he sat only a few feet away from Curran. If

the trade was unprofitable, he continued trading under Fidelity's

account at the CBOE until it became profitable. Srock would hold

off on submitting the tickets or ask other PTR clerks to delay

handling the trade until a profit was made. Connolly then sent the

proceeds of these trades to Englander through the CMTA process, but

in the beginning claimed they had been made in error. He

eventually told Englander that the trades were in fact not

mistakes. Connolly never received the profits of these

unauthorized trades; he testified that he did it in order to "prove

himself" and advance at Fidelity.

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 In late 1996 or early 1997, Connolly's unauthorized

trades began to generate multi-million-dollar losses. Connolly

told Callipari about his situation and was told either to confess

to Fidelity or to trade until he realized a profit. Callipari told

Connolly that in the latter case, he would help find someone to

take the trades. Connolly continued trading and made a $50,000 to

$60,000 profit, after which Callipari arranged for JAS to take the

trades. He also admonished Connolly that he was "crazy to do it

again" and should "knock it off." Connolly, however, continued to

place unauthorized trades, giving them either to JAS or to

Englander. Like with Englander, he initially told JAS that these

trades were errors.

B. Post-Fidelity relationship between Callipari and Connolly

On April 7, 1997, Callipari was fired from Fidelity and

was told by Lawrence Faulkner, executive vice president in charge

of Fidelity's Equity Division, that Fidelity would "refrain" from

dealing with broker/dealers and, in particular, that Fidelity would

no longer deal with Rockrimmon, Andover, and JAS. At a meeting the

next day with Fidelity's traders, Faulkner announced that Fidelity

had eliminated Callipari's position and would no longer be dealing

with his customers. Connolly's supervisors were at this meeting,

but Connolly himself was not. Callipari told Connolly that he had

been fired because Fidelity "didn't want to do any more business

with that type of customer." Fidelity did not assign a new

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representative to handle JAS's account. On April 18, 1997,

Fidelity closed JAS's account in its computer system. JAS,

however, was never told that it was no longer a Fidelity customer,

though Kevin Arnone, a JAS executive at the time of Callipari's

termination by Fidelity, testified that he assumed Callipari had

left Fidelity because Fidelity was not doing business with hedge

funds, which JAS is. Arnone also testified that he knew JAS could

not trade with Fidelity without an authorized Fidelity

representative. In any event, JAS stopped placing trades with

Fidelity after Callipari's firing.

Connolly, however, continued to place unauthorized trades

and send them to JAS. When he needed time to turn a profit, he let

the trades "break," meaning that they arrived at Fidelity without

a customer. This raised red flags at Fidelity in June 1997, but

Connolly assured the Purchase and Sales Department, which

investigated these unassigned trades, and Curran that he would take

care of the problem. Eventually, he made a profit and sent the

trades to JAS. Connolly also assured JAS that he would stop

trading for them.

On July 7, 1997, Callipari entered into a trading

agreement with JAS which provided that he would receive between

fifty and seventy percent of all profits earned on an account of

JAS which Callipari would trade. On his first day, he received an

unauthorized trade from Connolly, valued at $8,750, as "a present."

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When asked by Connolly whether he could continue to trade for

Callipari's JAS account, Callipari said that he could, on the

condition that he keep the volume "small and reasonable." For five

weeks, Connolly placed profitable and unprofitable trades directly

in Callipari's JAS account. Also, from this point, Connolly

stopped using CMTA and instead had Srock give up the trades

directly to JAS's clearing house, Spear, Leeds & Kellogg. As

encouragement, Callipari also told Connolly that he "had a good

instinct for the OEX" and if "things went well," they could "join

up" together. Connolly believed that through his relationship with

Callipari, he could one day become a trader for JAS.

At Callipari's request, Srock monitored Connolly's

activities. Srock reported Connolly's trading to Callipari by

phone in addition to faxing Callipari lists of Connolly's trades.

Callipari in turn paid Srock for "clerical services."1 Again,

Connolly usually reaped a profit for Callipari, but occasionally

left him with losses in the tens of thousands of dollars. Since

Connolly did not write tickets for these trades, Fidelity never

billed JAS.

From August 12 to 14, Connolly traded large amounts which

resulted in a loss, although he reduced it by further trading, and

1
On August 26, 1997, Srock sent Callipari a bill for $1,300
for "clerical services rendered" during July 1997, which Callipari
paid. On September 10, 1997, Callipari paid another bill from
Srock for the same, this time in the amount of $1,500.

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sent the trades to Callipari. On August 14, Callipari called

Connolly and told him that JAS was going to call him to "protect

themselves so you stop doing this." Stephen Segal, one of JAS's

owners, called Connolly and told him that they were on a recorded

phone line. Segal started, "We want a record of --" at which point

Connolly interrupted, "You want me to just say that I'll never do

it again." Segal instructed Connolly that "we do not want any more

trades," to which Connolly replied, "Yes sir. On a recorded line

. . . I promise I will never do it again." Connolly thereafter

recounted the conversation to Callipari.

Nevertheless, the next day, Connolly placed additional

trades in Callipari's account, resulting in a net profit of

$57,625. Four days later, on August 19, Connolly again traded in

Callipari's account, turning up a net profit of $5,937.50. The

following two days, Connolly traded and lost $172,962.50. After

accepting these losses, Callipari told Srock that Connolly could no

longer trade in his account. Concluding that Callipari "wanted to

take a break," Connolly ceased his unauthorized trading.

On August 25, Callipari withdrew $150,000 from his JAS

trading account, retaining half and giving the other half to JAS,

pursuant to his trading compensation agreement.

On September 9, 1997, Srock asked Connolly if he was

"coming out of retirement yet" and encouraged him to return to his

trading. On September 10 and 11, Connolly conducted additional

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unassigned trades, with a net profit of $130,625, and convinced

Callipari to take them. By this time, Connolly had made Callipari

quite a bit of money. Between July 7, 1997, when Callipari began

working for JAS, and September 12, 1997, Connolly's unauthorized

trading yielded Callipari a net profit of $606,071.58.

C. The week of September 15, 1997

Shortly after noon on Monday, September 15, 1997,

Connolly started making several large trades. He first sold 255

put options in the Sep 900 series for a total of $302,437.50.

During the day, the S&P initially rose, making the trades

profitable, but then fell, leaving the trades at a loss. At 3

p.m., Callipari called Srock to ask about any activity in his

account. Srock replied, "little bit," and lied that the trades

were "in the middle," when in fact they were losing. Callipari

warned him to "be careful."

At 3:30 p.m., Callipari called Srock again and asked,

"how'd you make out?" Srock admitted that "they're gettin' bad

now." Callipari said, "we can cover 'em tomorrow" and instructed

Srock to have Connolly call him. Later, Connolly and Callipari

argued over the phone. Connolly wanted to leave the trades open

while Callipari wanted to cover them, i.e. close the trade's

position by buying back the same number of options in the same

series, thus ending the loss. Connolly acquiesced and hedged by

purchasing 255 options in another series--Sep 905--for $488,250.

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Connolly told Srock, "It's all Richie, alright. . . . We'll be

trading out of these tomorrow," and instructed him to send the

trades to Callipari's account.

The next morning, Connolly undid the hedge by purchasing

255 Sep 900 puts for $205,515, leaving the Sep 905 side of the

previous day's hedge exposed. He had Srock send these puts to

Fidelity, where they broke without a customer. Connolly also

bought 255 new Sep 900 puts and sent them to Callipari's account.

Because the market had risen, the price of puts had fallen, and

Connolly paid only $54,187.50 for this new set of puts. Hence,

Connolly realized a $248,250 profit for Callipari on Sep 900 puts.

In addition, Connolly ordered thousands of other trades, some of

which went directly to Fidelity and others which he had Srock

"bury" by taking the tickets home with him. By the following

morning (September 17), PTR's management caught wind of these

"buried" trades and ordered that all trades from Connolly must go

to Fidelity from then on, and Srock had Connolly acknowledge on

tape that his trades that day were for Fidelity.

Early Wednesday morning, Srock asked Connolly whether he

should say anything to Callipari, to which Connolly responded,

"Don't say anything to him. Fuck him." Later the same morning,

Callipari called Srock and told him to call back "from downstairs"-

-all lines on the CBOE trading floor were recorded, but unrecorded

lines were available below the trading floor. On the unrecorded

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line, Callipari told Srock to sell and close a portion of the

exposed Sep 905 position. Callipari complained that he "wanted

[the position] covered yesterday . . . and nobody listens to me."

Throughout the rest of the day, Callipari instructed Srock to sell

the remaining 200 Sep 905 puts; by the end, he made only $59,937.50

on these particular sales, resulting in a net loss of $428,312.50

on the position. The $59,937.50 sale proceeds, however, were not

sent to Callipari's account but instead to Fidelity, where they

broke unassigned.

Later that afternoon, Callipari called Srock and asked

him to find out whether he could back out of the trades that had

been placed in his account that week because "they're not mine."

That night, Srock admitted to Callipari what Connolly had been

doing that week and they discussed placing the responsibility of

the loss on Connolly.

Meanwhile, Connolly drank and smoked crack cocaine all

Wednesday night and arrived at home Thursday morning. Upon

learning from the news that the market "didn't look so good" that

day, he stayed home and continued to "drink and use." He did not

go to work that day.

Early Thursday morning, Curran contacted the Purchase and

Sales Department to report the unassigned Sep 905 sales from the

day before. Then, after talking to PTR and JAS, Curran spoke to

Callipari, who claimed he knew nothing about the trades. Later,

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Callipari called Curran back and told her that on September 15,

Connolly had traded with Callipari's account, that the $488,000

loss was unauthorized, and he would not accept it. He did not

mention the $248,000 gain on the Sep 900 position.

Curran later called Srock to ask what trades Connolly had

put into Callipari's account that week. Srock told her about the

gain, whereupon Curran advised Callipari that Fidelity could accept

the loss if Fidelity also received the gain, an arrangement to

which Callipari agreed. Accordingly, Fidelity paid Callipari

$488,147.02 for the loss and charged him $240,425.21 for the gain.

Fidelity closed Connolly's remaining trades with a net loss of

$2.39 million.2

Early the same Thursday afternoon, Callipari spoke to

Steve Wolan, another PTR clerk. Wolan told Callipari that Curran

had been asking about Connolly's trading. Callipari insisted that

Connolly "never did anything for me before then. . . .[H]e had an

error, and he parked it my [sic] account." Wolan warned, "You

can't say it never happened when it did happen. They have it on

tape. If you lie, then all of a sudden you're perjuring yourself."

Callipari replied that he was not lying.

2
During the week, Callipari traded profitably in Sep 905 puts
through his account at Vandham Securities. Late Wednesday morning,
Callipari sold 255 Sep 905 puts through Vandham for $86,062.50. On
Thursday afternoon, he bought through Vandham 255 Sep 905 puts for
$24,843.75. Callipari never informed Fidelity of his trading
through Vandham and eventually closed his Vandham account on
Saturday, September 20.

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 That evening, Callipari called Srock at home and

discussed ways to "put it all on" Connolly. Later that night

through the next day, Callipari called Connolly five times,

repeatedly trying to assure him that "it's going to be all right"

and giving Connolly the name of a lawyer.

On Friday, September 19, Callipari called Sid Cichy, a

PTR floor trader, telling him that "Fidelity is not to know the

orders I've given your clerk." He warned, "I, you cannot give a

tape to Fidelity of me and your clerk talking." He claimed that he

had "checked with the JAS lawyer," who said the tape would not be

permitted in court. Callipari continued, "[A]ny conversation

between me and your clerk is between me and you, and if you give

any of those tapes to Fidelity, then JAS is going to have a problem

with that."

D. Investigations by Fidelity and the SEC

Beginning September 20, 1997, Fidelity investigated

Connolly's unauthorized trading. It uncovered tickets of trades

with JAS and eventually billed JAS for trades conducted from March

to May 1997. In an interview with Randolph Brock, Fidelity's

Senior Vice President for Operations Audit and Analysis, Callipari

claimed that the September incident was the only time Connolly had

made unauthorized trades, and that he and Connolly had no prior

arrangement to trade. He told Brock that he had been on vacation

on September 15 and 16, 1997, and had discovered unauthorized

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trades in his account on September 17. Callipari also stated that

he did not work for JAS, did not know who ran JAS, and did not

receive money from the JAS account.

Fidelity then turned the matter over to the SEC, which

interviewed Callipari on February 11, 1998. He stated to the SEC

under oath that he paid Srock for "clerical services," that on

September 15, 1997, he told Connolly to stop making trades for him,

that he had not authorized any trades since the losses incurred

during the August 12-14, 1997 period, and that he had neither

authorized nor accepted the trades made by Connolly on September 15

and 16, 1997.

E. Procedural History

On April 25, 2001, the government filed an indictment in

the District of Massachusetts charging Callipari and Connolly with

conspiracy to commit wire fraud, and Callipari with wire fraud and

perjury. On May 10, 2001, Connolly pled guilty pursuant to a plea

and cooperation agreement. Callipari moved to dismiss two of the

wire fraud counts and the perjury counts for lack of venue, and the

perjury counts on the basis that his answers were literally true.

On May 7, 2002, pursuant to Fed. R. Crim. P. 48(a), the government

dismissed the indictment against Callipari without prejudice, on

the ground that it would bring an indictment of the same charges

before a federal grand jury in the District of Rhode Island.

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 On July 30, 2002, that grand jury indicted Callipari in

the District of Rhode Island for conspiracy to commit wire fraud,

wire fraud, and obstruction of an SEC proceeding. Trial commenced

on January 22, 2003. Pursuant to Fed. R. Crim. P. 29, Callipari

moved for judgment of acquittal on all counts at the conclusion of

the government's case. The district court denied the motion as to

the conspiracy and wire fraud counts. On the obstruction count,

the court granted the motion in part, denied it in part, and

reserved decision in part. Callipari renewed his Rule 29 motion at

the close of all evidence. On February 5, 2003, the jury convicted

Callipari on all counts. The next day, the court denied both of

Callipari's Rule 29 motions as to the portion of Count 12 on which

it had earlier reserved its ruling. On April 28, 2003, he was

sentenced to thirty months' incarceration, two years' supervised

release, a $7,500 fine, and a $1,200 special assessment. This

appeal followed.

II. FRAUD

A. Requested jury instruction on apparent authority

Callipari first contends that the district court erred

when it refused to instruct the jury on his defense theory: that in

order to convict him of wire fraud, the government was required to

prove Connolly lacked the apparent authority to trade for

Callipari's JAS account and that failure to do so necessitated

acquittal.

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 We review a district court's refusal to give a requested

jury instruction for abuse of discretion. United States v. Otero-

Méndez, 273 F.3d 46, 55 (1st Cir. 2001). First, the defendant must

present sufficient evidence to be entitled to a requested

instruction. United States v. Gamache, 156 F.3d 1, 9 (1st Cir.

1998). We review de novo the sufficiency of the evidence

supporting the proposed instruction. United States v. Lopez-Lopez,

282 F.3d 1, 18 (1st Cir.), cert. denied, 536 U.S. 949 (2002);

United States v. Rodriguez, 858 F.2d 809, 812 (1st Cir. 1988). We

"examine the evidence on the record and [] draw those inferences as

can reasonably be drawn therefrom, determining whether the proof,

taken in the light most favorable to the defense can plausibly

support the theory of the defense." Gamache, 156 F.3d at 9

(emphasis added).

If the evidence is sufficient, a court's refusal to give

a requested instruction is reversible error only if the instruction

was "(1) substantively correct; (2) not substantially covered

elsewhere in the charge; and (3) concerned a sufficiently important

point that the failure to give it seriously impaired the

defendant's ability to present his or her defense." United States

v. Prigmore, 243 F.3d 1, 17 (1st Cir. 2001).

The requested instructions read:

The government must prove beyond a
reasonable doubt that Mr. Connolly lacked the
apparent authority to conduct the trades.
Apparent authority is distinct from actual

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 authority because authority need not have
existed; instead, it is the belief of the
third party - here, Mr. Callipari - that
authority existed that is relevant.
Apparent authority to do an act is
created as to a third person by written or
spoken words or any other conduct of the
principal which, reasonably interpreted,
causes the third person to believe that the
principal consents to have the act done on its
behalf by the person purporting to act for
him. . . . Information from which the third
party comes to believe the apparent authority
exists may come from direct statements from
the principal by letter or word of mouth,
authorized statements from the agent,
documents or other indicia of authority given
by the principal to the agent or third persons
who have heard of the agent's authority in
authorized or permitted communications.
Appointing a person to a position that carries
with it generally recognized duties or
permitting someone to act in a way that
establishes a reputation for so acting can
create apparent authority.

In other words, according to his defense theory,

Callipari could not have had the intent to defraud Fidelity if he

thought that JAS was still a Fidelity customer when he authorized

Connolly to trade for his JAS account, accepted all those trades

made by Connolly, but eventually rejected those trades allegedly

made without his knowledge or against his orders. To convict a

defendant of wire fraud or conspiracy to commit wire fraud, the

government must prove beyond a reasonable doubt that he acted with

intent to defraud the alleged victim. United States v. Cassiere,

4 F.3d 1006, 1011 (1st Cir. 1993). Good faith is a complete

defense and it is the government's burden to disprove it beyond a

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reasonable doubt. United States v. Diaz, 285 F.3d 92, 97 n.5 (1st

Cir. 2002).

We need not decide whether sufficient evidence supported

the instruction because as requested by Callipari, the instruction

was a substantively incorrect red herring. With regard to what

constituted a "scheme to defraud," the court instructed in

accordance with the indictment:

[T.J.] Connolly would engage in
unauthorized trading in index options and
other securities, using his position on the
Fidelity options trading desk to execute the
trades;
The conspirators would conceal from
Fidelity Connolly's unauthorized trading;
If the trades were successful, and made
a profit, Connolly would direct the trades to
Callipari's JAS account; and
If the trades were unsuccessful, and
resulted in a loss, Callipari could always
reject the trades, which would result in
Fidelity incurring the loss on the trades,
since they had been initiated by Fidelity's
employee (Connolly), using Fidelity's trading
facilities.

The court defined "defraud" as "depriv[ing] another of

something of value by means of deception or cheating" and "intent

to defraud" as "act[ing] willfully and with the specific intent to

deceive or cheat, or for the purpose of either causing some

financial loss to another or bringing about some financial gain to

oneself." The court also instructed, "Thus, if the defendant acted

in good faith, he cannot be guilty of the crime."

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 Callipari claims that "the lynchpin of the government's

case, as stated in the Indictment and its opening and closing

arguments, was that he 'knew that JAS was no longer a Fidelity

customer who could authorize trades' when Connolly traded for his

JAS account." Callipari contends that the government stuck to this

theory throughout trial and in response, one of the defense's

central claims was that he believed JAS had been reinstated by

Fidelity as a customer.

The government, on the other hand, counters that

Callipari "misstates the nature of his fraud." The broader

prosecution theory, the government argues, was that Callipari "'did

not reject trades made . . . against his orders,' but rather

authorized Connolly to trade for him, then rejected Connolly's

unprofitable trades by falsely claiming that the trades were made

against his orders." It follows that "[e]ven if Callipari had been

a Fidelity customer, those actions would have constituted fraud."

Throughout trial and highlighted in its summation, the government

presented this theory of the fraudulent scheme to the jury.

Though the issue of Callipari's awareness of JAS's status

with Fidelity was hotly contested throughout, it was only one of

several foci and certainly was not the sole "lynchpin" of the

prosecution. "A jury need not believe that the defendant did

everything the indictment charges; it may convict if it believes he

did some of the things the indictment charges and if those things,

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by themselves, amount to a violation of the statute[,]" provided

that the indictment "enable[s] the accused to know the nature and

cause of the accusation against him." United States v. Doherty,

867 F.2d 47, 55 (1st Cir. 1989) (internal quotation marks omitted).

The indictment here satisfied this notice requirement. Moreover,

"a part of the indictment unnecessary to and independent of the

allegations of the offense proved may normally be treated as a

useless averment that may be ignored." United States v. Ayala, 289

F.3d 16, 22 (1st Cir. 2002) (quoting United States v. Miller, 471

U.S. 130, 136 (1985)).

Callipari, if he truly had been a customer of Fidelity,

may have had the right to reject trades, including unprofitable

ones, if he had not authorized them. He, however, did not have

that right and was legally prohibited from "free-riding" off

Fidelity: concealing trades from Fidelity, claiming unprofitable

trades were unauthorized and demanding that Fidelity take them

back, but accepting those trades that turned a profit. The factual

issue of whether he knew about JAS's status with Fidelity was not

necessary to a conviction for fraud and conspiracy to defraud.

"Even false statements or omissions of a material fact do not

constitute a violation of the [wire] fraud law unless made with an

intent to defraud." United States v. Bradstreet, 135 F.3d 46, 51

(1st Cir. 1998). Here, however, the government proved that

requisite intent beyond a reasonable doubt not just by presenting

-22-
evidence and arguing that Callipari knew JAS was no longer a

Fidelity customer, but, more critically, that Callipari knew he was

acting illegally when he sent back as "unauthorized" trades he had

sanctioned.

Pinning his appeal on the issue of apparent authority

misses the core and extent of the fraud alleged in the indictment

and argued at trial by the government. In its closing argument,

the government emphasized evidence of the incipient unauthorized

trades running from late 1996 through April 1997 and what the

government characterized as sham attempts by Callipari to stop

Connolly's trading. It also highlighted evidence of Callipari's

authorization of the September 1997 trades, Callipari's statements

to Brock, as well as his phone conversations with PTR clerks during

the week of September 15, 1997 as the scheme began to implode. All

of this evidence was aimed at proving Callipari's part in a

conspiracy to conceal certain trades and return losing ones as

"unauthorized," independent of the allegation that he knew JAS was

no longer a Fidelity customer.

The defense itself appeared to have recognized this

prosecution theory. For instance, Callipari argued in closing that

his collaboration with Connolly during the late 1996-April 1997

period was a one-time deal. Moreover, he strenuously claimed that

he ordered Connolly to stop trading, that he did not authorize the

September 15, 1997 trades, and that he was entitled to return those

-23-
trades because Connolly had acted without his knowledge and against

his orders. These arguments were aimed at rebutting the notion

that Callipari sanctioned and hid the September trades from

Fidelity, only to unearth them as "unauthorized" upon realizing

large losses and upon Fidelity's discovery of the unassigned trades

involved in the scheme. Allegations as to Callipari's knowledge of

JAS's status with Fidelity were "surplusage" within this fraudulent

scheme contemplated by the indictment and by both the government

and defense throughout trial. Ayala, 289 F.3d at 22 (quoting

United States v. McVeigh, 153 F.3d 1166, 1196 (10th Cir. 1998)).

Hence, we conclude that the district court did not abuse

its discretion in denying Callipari's requested jury instruction on

apparent authority. Even if Callipari could have convinced the

jury that he believed himself and JAS to be Fidelity customers, the

jury was not required to acquit him.

B. Cross-examination and closing

The government, one month before trial, filed a motion in

limine, arguing that (1) evidence of what Fidelity knew or should

have known should be excluded because it was "not a defense that

Fidelity could have prevented the fraud"; (2) evidence that

Fidelity knew about the fraud would be irrelevant; and (3) that

even if such evidence was relevant, its prejudicial effect on the

government's case outweighed its probative value. In his

opposition to the motion, Callipari contended that (1) evidence

-24-
that Fidelity knew or should have known that Connolly was trading

for Callipari's JAS account would show that Callipari's belief to

that effect was reasonable and therefore held in good faith; (2)

evidence that Fidelity employees knew Connolly was trading for JAS

would disprove the allegation that the trading was "unauthorized"

because Callipari knew JAS was not a Fidelity customer; and (3)

that evidence of Fidelity's employees' failure to supervise

Connolly in accordance with securities laws would show bias on

their part, and was thus admissible. The district court made no

ruling on the motion before trial.

During trial, the court limited cross-examination of

Curran and other Fidelity employees regarding the circumstances of

Connolly's trades, their knowledge of those trades, as well as

opportunities and duties to investigate Connolly's behavior.

During the unrecorded February 2, 2003 charge conference, the court

warned that if the defense included in its closing argument any

claim of what Fidelity knew or should have known, it would give the

government's requested supplemental instruction entitled "Victim

Carelessness No Defense."3

3
That instruction reads:

"It is not a defense to the crime of wire fraud, or conspiracy
to commit wire fraud, that the victim institution, Fidelity
Investments, could have done something more than it did to prevent
the offense. In other words, if you find that the government has
proved all the elements of wire fraud, or conspiracy to commit wire
fraud, beyond a reasonable doubt, it is no defense that such fraud
or conspiracy might not have occurred if Fidelity had better

-25-
 A defendant has a Sixth Amendment right to effective

cross-examination of key adverse witnesses. Delaware v. Van

Arsdall, 475 U.S. 673, 679 (1986); U.S. CONST . art. VI. Trial

judges, however, "retain wide latitude insofar as the Confrontation

Clause is concerned to impose reasonable limits on such cross-

examination based on concerns about, among other things,

harassment, prejudice, confusion of the issues, the witness'

safety, or interrogation that is repetitive or only marginally

relevant." Van Arsdall, 475 U.S. at 679. "The Confrontation

Clause guarantees an opportunity for effective cross-examination,

not cross-examination that is effective in whatever way, and to

whatever extent, the defense might wish." Delaware v. Fensterer,

474 U.S. 15, 20 (1985) (per curiam) (emphasis in original).

It is reversible error to preclude such cross-examination

if the court either relied on "an incorrect legal standard" or

"made a clear error in judgment . . . based upon a weighing of the

relevant factors." United States v. Shay, 57 F.3d 126, 132 (1st

Cir. 1995). "Confrontation clause challenges are reviewed de novo

to determine whether defense counsel was afforded a reasonable

opportunity to impeach adverse witnesses; once that threshold is

internal controls or had acted with greater care.
Therefore, any evidence that Fidelity could have done
something to prevent any fraud or conspiracy which you find
occurred, or evidence that Fidelity's procedures were somehow
deficient, should not be considered by you as an excuse or defense
to any wire fraud or conspiracy to commit wire fraud which you find
has been proven beyond a reasonable doubt."

-26-
reached, the trial court's restrictions on the extent and manner of

cross-examination are reviewed only for abuse of discretion."

United States v. Gonzalez-Vazquez, 219 F.3d 37, 45 (1st Cir. 2000)

(internal quotation marks and citations omitted); Brown v. Powell,

975 F.2d 1, 5 (1st Cir. 1992). In particular, restrictions on

cross-examination regarding bias are erroneous only if they are

"manifestly unreasonable or overbroad." United States v. Gomes,

177 F.3d 76, 81-82 (1st Cir. 1999). Finally, "[t]o establish that

the district court has abused its discretion, the defendant must

show that the limitations imposed were clearly prejudicial."

United States v. Anderson, 139 F.3d 291, 302 (1st Cir. 1998)

(quoting United States v. Williams, 985 F.2d 634, 639 (1st Cir.

1993)). "It follows logically, therefore, that should an error be

revealed, we may affirm the conviction if we are confident that it

was harmless beyond a reasonable doubt." Id. (quoting Van

Arsdall, 475 U.S. at 681).

1. Defense theory

The court limited questioning and argument on the above

issues because it concluded that Callipari was trying to "blame the

victim" and suggest that Fidelity was defrauded because it had been

careless. The court allowed some questioning of Curran concerning

the fact that she sat next to Connolly and was his supervisor. She

also testified as to her knowledge of Connolly's substance abuse.

The court restricted cross-examination of Curran as to whether she

-27-
knew Connolly was lying about the nature of trades he made in June

1997. It also limited cross-examination on what Callipari claims

was her "lack of diligence" in accepting Connolly's assurances in

June 1997 that he had resolved problems with unassigned trades, a

similar negligence in not reporting Connolly to her superiors

during the same time, and about whether she thought anything

appeared to be wrong with Connolly during the week of September 15,

1997. The court also restricted the defense's inquiry of Curran's

supervisor, Joseph Valenza, on what measures Fidelity had in place

to prevent Connolly from entering a trade for his own benefit, and

of Brock on what attempts he had made, if any, to determine the

veracity of statements made to him by Callipari during Fidelity's

September 1997 investigation. Finally, the court forbade Callipari

from examining Connolly about Fidelity's knowledge of his own

substance abuse.

Callipari claims that information he would have elicited

from the above inquiries was essential to his good faith defense,

since it would have tended to prove that if he reasonably thought

Fidelity knew Connolly was trading for JAS, he could also

reasonably believe that Connolly had authority to trade for JAS.4

4
Callipari also contends that the district court erroneously
excluded from evidence a bill sent by Fidelity to JAS in November
1997 for trades conducted by Fidelity between April 7, 1997 and May
8, 1997. The bill was sent two months after discovery of the
fraud; hence, it has minimal if not zero relevance to Callipari's
intent or to Curran's purported bias. Moreover, Kevin Arnone,
JAS's then-CFO, testified at trial as to the contents of the bill.

-28-
With respect to the "free-riding" scheme of the week of September

15, 1997, Callipari argues that the jury could infer that despite

being told in April 1997 by Faulkner that Fidelity would refrain

from dealing with JAS, it appeared to Callipari that by July 1997,

JAS had been reinstated as a Fidelity customer. According to this

theory, Callipari then was within his rights as a Fidelity customer

to demand Fidelity to take back the September trades.

The government characterizes the defense's theory as

follows: the jury could have found good faith only if it concluded

that Fidelity employees had the duty and opportunity to learn about

Connolly's trades and then inferred that Callipari knew about that

duty and opportunity; then, that Callipari believed, without any

inquiry, that Curran knew Connolly was trading for him; and

further, that he believed JAS remained or had been reinstated as a

Fidelity customer. The government argues that the jury would have

had to make one final, "even more remote" inference: that Callipari

did not authorize Connolly's September 15, 1997 trades and return

them to Fidelity under the false pretense that he had never

authorized them.

The district court's handling of cross-examination on the

above issues was based on two concerns: repetition and confusion.

Given strong and competing evidence of Faulkner's explicit

statement to Callipari that Fidelity would no longer do business

with JAS, Connolly's known history of unauthorized trading, and

-29-
Callipari's attempts to hide Connolly's trading from Fidelity, the

court exercised its "wide latitude under the Sixth Amendment to

limit repetitive or marginally relevant cross-examination." United

States v. Perez-Montanez, 202 F.3d 434, 440 (1st Cir. 2000). The

court also recognized that delving far into alleged failures by

Fidelity employees to police Connolly would have misdirected the

jury. We stress that the court did not wholly exclude such cross-

examination, but only stopped it short when it determined that

further inquiry was repetitive or would lead the jury astray. The

court was well within its discretion to exclude evidence suggesting

that Fidelity, rather than Callipari and his co-conspirators, was

to blame for the loss.5

Again, the court allowed cross-examination of Curran with

regard to the following: her proximity to Connolly at the Fidelity

trading desk; her ability to observe Connolly from her vantage

point; what she knew about Connolly's alcohol and drug abuse; what

she knew about the termination of JAS's account at Fidelity; her

status as a supervisor; her knowledge of the June 1997 trades and

what steps she took to investigate them; whether she knew Connolly

was trading for Callipari; whether she knew about Connolly's

5
That Connolly's supervisors should have been aware of
Connolly's improper trades is not a defense to committing wire
fraud and conspiracy to wire fraud. United States v. Brien, 617
F.2d 299, 311 (1st Cir. 1980); see also United States v. Moore, 923
F.2d 910, 917 (1st Cir. 1991) (not a defense to fraud that a
corporate victim had insufficient internal controls or procedures
to prevent the fraud).

-30-
trading on September 10, 1997; and whether she found Connolly's

behavior unusual during the week of September 15, 1997. The

defense cross-examined Valenza on whether Fidelity had adequate

procedures to track certain options trades, though the court

precluded questioning on what checks Fidelity had in place to

prevent options traders from trading for their own benefit.

Given the substantial cross-examination of Fidelity

employees the court allowed Callipari to conduct, we cannot say

that the court failed to afford Callipari a reasonable opportunity

to cross-examine government witnesses on his purported defense

theory. Nor was it an abuse of discretion for the court to

restrict further cross-examination on the well-founded concern that

suggestions of "blaming the victim" might turn into a "fishing

expedition" that would confuse the issues for the jury and unfairly

prejudice the government's case. United States v. Zaccaria, 240

F.3d 75, 81 (1st Cir. 2001); United States v. Mulinelli-Navas, 111

F.3d 983, 988 (1st Cir. 1997); Fed R. Evid. 403. On the same

basis, we find no abuse of discretion by the district court in

declining to allow further cross-examination with a limiting

instruction telling the jury for what purposes the evidence

elicited could and could not be used. See Miller v. Town of Hull,

Mass., 878 F.2d 523, 529 (1st Cir. 1989).

-31-
 2. Bias

We can only conclude the same with respect to Callipari's

other assertion that the district court erred by forbidding him to

cross- examine Curran and other Fidelity employees for bias,

positing that they feared potential discipline for failing to

adequately supervise Connolly and thus had motive to claim

ignorance of Connolly's activities in their testimony. Callipari

argues that Curran's acceptance of Connolly's explanation of the

June 1997 trades and "failure" to take action with respect to

Connolly's substance abuse amounted to "a textbook case of failure

to supervise" and exposed her and Fidelity to severe penalties.

Accordingly, Callipari contends, had the court allowed cross-

examination on Curran's duty to supervise and the consequences of

a failure to carry out that purported duty, the responses "would

have a tendency to make the facts to which [she] testified less

probable in the eyes of the jury than it would be without such

testimony," quoting United States v. Abel, 469 U.S. 45, 51 (1984).

To meet the constitutional standard, the district court

"must ensure that the jury is provided with 'sufficient information

concerning formative events to make a "discriminating appraisal" of

a witness's motives and bias.'" United States v. Lynn, 856 F.2d

430, 433 (1st Cir. 1988) (quoting United States v. Twomey, 806 F.2d

1136, 1140 (1st Cir. 1986) (quoting United States v. Campbell, 426

F.3d 547, 550 (2d Cir. 1970))). "In the usual case, 'if the jury

-32-
had sufficient other information before it, without the excluded

evidence, to make a discriminating appraisal of the possible biases

and motivations of the witness,'" we need not inquire further.

United States v. Anderson, 139 F.3d at 302 (quoting United States

v. Tracey, 675 F.2d 433, 437 (1st Cir. 1982)). The Confrontation

Clause does not give a defendant the right to cross-examine on

"every conceivable theory of bias." Bui v. DiPaolo, 170 F.3d 232,

242 (1st Cir. 1999). The court may limit cross-examination if the

defendant is unable to lay a proper evidentiary foundation. Where

the theory of bias is "inherent[ly] speculative[]," the court may

"prohibit[] cross-examiners from mounting fishing expeditions."

Id. at 244. Without such limits, unchecked cross-examination on a

theory of bias may unfairly prejudice the opposing party's case and

only bring forth "marginally relevant" evidence. Van Arsdall, 475

U.S. at 679. Again, erroneous restrictions on examination are

reviewed for harmlessness. Id. at 684.

Callipari's concern with Curran was that her testimony,

along with that of other Fidelity witnesses, provided the

circumstantial evidence from which the jury could infer that

Callipari knew that JAS was not a Fidelity customer because Curran

testified that JAS was not in fact a customer and that she had no

knowledge of any trading with JAS after Callipari's departure from

Fidelity. We stress yet again that this theory misses the nature

and extent of the fraud alleged and proven by the government.

-33-
 Regardless, we conclude that the constitutional threshold

was met here, as the jury had sufficient other information before

it to make a "discriminating appraisal" of any bias on the part of

Curran. As to supervisory duties, the court allowed enough cross-

examination of Curran to inform the jury that "as part of [her]

duties and obligations," she had to "make sure [people she was

supervising] were trading appropriately," which "includ[ed] having

customers for the trades that they were placing." The defense also

examined Curran about the two securities exams she had taken and

passed, specifically for licenses to supervise general securities

and options trading. The court stopped the examination short when

defense counsel asked whether "duties" imposed by these licenses

"motivated the steps that [she] took on September 18, 1997." After

the court sustained the government's objection, the defense

elicited from Curran a detailed account of how she responded to the

suspicious trades of September 15, 1997; it proved to be no

different from what she had testified to on direct examination.

The record reveals that Callipari was given ample room to

impeach Curran's testimony otherwise. We therefore find no error

in this single limitation on the content of Curran's purported

supervisory duties and the potential consequences of not carrying

them out. Allowing cross-examination on these subjects would have

posed the danger of confusing the issues for the jury rather than

suggesting any bias or improper motivation by Curran. Moreover,

-34-
the connection with bias is remote, as the SEC had already closed

its investigation and Curran would soon leave Fidelity after trial

to raise her children. There was no identifiable threat of

prosecution or penalty from either the government or Fidelity. See

Gomes, 177 F.3d at 81.

3. Closing argument

Callipari asserts that the district court compounded its

errors by threatening to give the government's "Victim Carelessness

No Defense" instruction if he made any argument regarding what

Fidelity knew or should have known about Connolly's behavior.

First, we note that the instruction itself is not erroneous. See

supra note 4. In any event, the court did not give the

instruction.

At trial, Callipari did not object to the court's

restriction of his closing argument. Hence, we review the

restriction for plain error, see United States v. Grabiec, 96 F.3d

549, 552 (1st Cir. 1996), requiring Callipari to "show an obvious

and clear error under current law that affected his substantial

rights." Id. (omitting internal quotation marks and citation).

Trial courts have broad discretion over the scope of summations,

especially to "ensure that argument does not stray unduly from the

mark, or otherwise impede the fair and orderly conduct of the

trial." Herring v. New York, 422 U.S. 853, 862 (1975). The

court's purpose in warning Callipari was to focus the trial on the

-35-
central issue of fraudulent intent. As much as Callipari claims

that questions of Fidelity's duty to know are relevant to a defense

theory of good faith, the court did not transgress its discretion

in limiting, but not wholly excluding, such inquiry in order to

assure the jury's correct and complete comprehension of the case.

Also, given that throughout trial, the district court properly and

correctly forbade any argument on Fidelity's duty to know, we find

no error, let alone plain error, with its admonition to defense

counsel regarding closing argument.

III. OBSTRUCTION

The obstruction statute under which Callipari was

convicted provides, in relevant part:

Whoever corruptly, . . . influences,
obstructs, or impedes or endeavors to
influence, obstruct, or impede the due and
proper administration of the law under which
any pending proceeding is being had before any
department or agency of the United States, . .
. shall be fined under this title or
imprisoned not more than five years, or both.

18 U.S.C. § 1505. We first address Callipari's claim of error

regarding the court's instructions to the jury on the obstruction

count.

A. Requested jury instruction on "natural and probable effect"

Callipari's Requested Instruction No. 45 read:

To prove that Mr. Callipari acted "corruptly,"
the government must establish, beyond a
reasonable doubt, that his actions were
prompted by an improper motive, or an evil or
wicked purpose, having decided in his mind

-36-
 what he would do and that he then did
something the law prohibits. The government
also must prove that his actions were
purposeful and that his conduct had the
natural and probable effect of obstructing the
investigation.

In his written request, Callipari relied on United States

v. Aguilar, 515 U.S. 593, 600 (1995), for the proposition that his

conduct must have had "the natural and probable effect" of

obstructing the SEC investigation. The district court instructed

the jury that in order to find Callipari guilty of obstruction of

the SEC investigation, it had to find he acted "corruptly," which

was defined as "having an improper motive or purpose of obstructing

the proceeding," and that to prove Callipari acted corruptly, "the

government must prove beyond a reasonable doubt that his actions

were prompted by an improper motive to do something the law

prohibits." After the court gave the charge, Callipari objected

out of the jury's hearing, "With respect to 'corruptly,' the intent

element on the obstruction charge, we do request that the evil or

wicked bad purpose instruction that's been--that was Defendant's

Request Number 45 and in the case law that's cited there be given

as part of that instruction." In this objection, no mention was

made of the "natural and probable effect" component. The court

declined the request and responded that its instruction reflected

"the current statement of the law in the First Circuit."6

6
In addition to the objection Callipari made after the court
had charged the jury, he claims that he alerted the court to

-37-
 The government contends that the court's denial of

Callipari's Requested Instruction No. 45 should be reviewed for

plain error because he did not object "distinctly" or

"specifically" enough, as required by Fed. R. Crim. P. 30, to

preserve the issue.7 Objections are not distinct if they merely

Aguilar and his request for the "natural and probable effect"
language during the February 3, 2003 charge conference, held the
day before the actual charge. As was the practice of the court,
the conference was not recorded. Callipari claims that the court
explicitly "rejected that portion of Request No. 45 relating to
natural and probable effect." He also recalls that he directed the
court's attention to Aguilar for the proposition that the court was
required to instruct that his conduct must have had "the natural
and probable effect" of obstructing the SEC investigation. The
government counters that neither the "natural and probable effect"
portion of the requested instruction nor Aguilar (or any other
precedent for Callipari's assertion) was mentioned by either party
during the charge conference.
In response to Callipari's motion for a statement of
proceedings pursuant to Fed. R. App. P. 10(c), the district court,
in a Memorandum and Order dated December 11, 2003, admitted that it
had "no recollection of either the Government's or the Defendant's
version of what was discussed regarding Aguilar or the 'natural and
probable effect of obstructing the investigation.'" The court
agreed with Callipari that during the charge conference, it
"indicated the appropriate analysis is limited to the defendant's
purpose, not any effect, and thus rejected that portion of Request
No. 45 relating to natural and probable effect."

This explanation still leaves us uncertain. Fortunately, we
need not inquire further into the facts of the unrecorded charge
conference to decide whether the court's refusal to include the
"natural and probable effect" language merits reversal. For
reasons made obvious by this case, however, we encourage district
courts, in exercising their discretion whether or not to record
charge conferences, to consider the difficulties that non-
recordation may engender.
7
Fed. R. Crim. P. 30 was amended on December 1, 2002, before
the commencement of Callipari's trial. The old rule required
objections to be stated "distinctly" while the new rule requires a
"specific objection." The Advisory Committee Notes suggest that

-38-
incorporate arguments in the charge conference by reference. See

United States v. Gabriele, 63 F.3d 61, 66 (1st Cir. 1995). The

objecting party must state the grounds for the objection; uttering

"objection" is not enough. United States v. O'Connor, 28 F.3d 218,

220-21 (1st Cir. 1994); United States v. Wilkinson, 926 F.2d 22, 26

(1st Cir. 1991).

The amended rule does not affect the old rule's warning

that it cannot be "satisfied by counsel's pre-charge colloquy with

the court or written explanation of grounds alone, nor even by a

post-charge attempt to incorporate by reference earlier arguments."

Fed. R. Crim. P. 30(d) (amended 2002); Advisory Committee notes on

2002 amendments ("No change in practice is intended by the

amendment."). In his objection, Callipari mentioned only the "evil

or wicked bad purpose" component of his requested instruction. He

did not cite the language to which he now assigns error; nor did he

specifically mention Aguilar or any other precedent supporting an

the amendment is "part of the general restyling of the Criminal
Rules to make them more easily understood and to make style and
terminology consistent throughout the rules." Advisory Committee
Notes on 2002 amendments. The Notes specifically state that the
amendment does not change the practice of objecting after the court
gives its instructions as well as the clarity required of counsel
in making an objection. Id. The one substantive area affected by
the amendment is that the Rule now provides for plain error review
of an issue not preserved, whereas previous versions were sometimes
read to preclude such review. Id. ("As the Supreme Court
recognized in Jones v. United States, 527 U.S. 373 (1999), read
literally, [old] Rule 30 could be construed to bar any appellate
review absent a timely objection when in fact a court may conduct
a limited review under a plain error standard.").

-39-
instruction containing the "natural and probable effect" language.

When the court replied that its "corruptly" definition was the

correct statement of the law, it likely was referring to the words

Callipari proffered in his objection, and was not aware, because it

was not made aware, of the "natural and probable effect" language.8

We need not decide, however, whether Callipari preserved

his objection. Even assuming the district court erred in refusing

to include the "natural and probable effect" language in its

8
In response to the panel's inquiry at oral argument regarding
the effect of the amended Rule 30, Callipari argues that Fed. R.
Civ. P. 51 has been interpreted as precedent for Fed. R. Crim. P.
30 and that the former, as amended in 2003 and described in the
following excerpt from the 2003 Advisory Notes, applies here:

Many cases hold that a proper request for a
jury instruction is not alone enough to
preserve the right to appeal failure to give
the instruction. The request must be renewed
by objection. This doctrine is appropriate
when the court may not have sufficiently
focused on the request, or may believe that
the request has been granted in substance
although in different words. But this
doctrine may also prove a trap for the unwary
who fail to add an objection after the court
has made it clear that the request has been
considered and rejected on the merits. [Rule
51] establishes authority to review the
failure to grant a timely request, despite
failure to add an objection, when the court
has made a definitive ruling on the record
rejecting the request.

Advisory Committee Notes on 2003 amendments. The government's
response to the analogy suffices: the charge conference and the
district court's ruling on Callipari's request at the charge
conference were not "on the record."

-40-
charge, the error is harmless and is not cause for reversal.

United States v. Blastos, 258 F.3d 25, 27 (1st Cir. 2001).

Under the harmless error standard, we ask "whether it

appears beyond a reasonable doubt that the error complained of did

not contribute to the verdict obtained." Id. (quoting Neder v.

United States, 527 U.S. 1, 15 (1999)) (internal quotation marks

omitted). To answer this question, we first turn to Aguilar, where

the Supreme Court held that another obstruction statute, 18 U.S.C.

§ 1503, requires proof that the defendant's actions have the

"natural and probable effect" of obstructing an investigative

proceeding--in essence, a "nexus" between the actions and the

proceeding. 515 U.S. at 599-600. Other circuits have required the

same showing for § 1505. See United States v. Senffner, 280 F.3d

755, 762 (7th Cir.), cert. denied, 536 U.S. 934 (2002); United

States v. Hopper, 177 F.3d 824, 830-31 (9th Cir. 1999). We have

characterized § 1505 as a sister provision to § 1503.9 United

States v. Brady, 168 F.3d 574, 578 (1st Cir. 1999).

Callipari included the "natural and probable effect"

language as part of his request for a definition of "corruptly."

The government contends that in § 1505 cases decided since Aguilar

9
The relevant provisions from the two statutes are nearly
identical. The only difference is what type of proceeding the
defendant is obstructing. Section 1505 covers obstruction of
proceedings before Congress or a federal agency. The "Omnibus
Clause" of § 1503, which was the focus of Aguilar, applies to
obstruction of "the due administration of justice" in the federal
courts.

-41-
(and Aguilar itself for § 1503 prosecutions), courts have held that

the government must show that the "endeavor" to obstruct a

government proceeding must have had a "natural and probable effect"

of interfering with the proceeding. Senffner, 280 F.3d at 762;

Hopper, 177 F.3d at 830-31. None of these courts, however, went as

far as to assert that "natural and probable effect" specifically

modified "endeavor" as opposed to articulating a general

requirement that the government show an obstructive "nexus" between

the defendant's actions and the proceeding. In any event, the law

in this circuit is not clearly settled on whether the government

must prove a "nexus," and if so, how the requirement must be

articulated in a jury charge.10

The district court here appeared to have concluded that

the "nexus" requirement was better couched in its instruction on

"endeavor":

The word "endeavor" means any effort or any
act, however contrived, to obstruct or
interfere with the proceeding. It is the
endeavor which is the gist of the crime.
Success of the endeavor is not an element of
the crime. The term "endeavor" includes
conduct which is aimed at influencing,
intimidating or impeding the proceedings.

(emphasis added). Indeed, this instruction reflects the Supreme

Court's basic concern that, "if the defendant lacks knowledge that

his actions are likely to affect the [] proceeding, he lacks the

10
It is our belief that the better practice would be to include
the "natural and probable effect" language in the instruction.

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requisite intent to obstruct" and that "the act must have a

relationship in time, causation, or logic with the [] proceedings."

515 U.S. at 599 (citations omitted); see also Senffner, 280 F.3d at

762; Hopper, 177 F.3d at 830-31. The instructions, read

collectively, adequately informed the jury that the government had

to prove a "nexus" between Callipari's acts and the SEC proceeding.

See Gomez, 255 F.3d at 39.

Moreover, the SEC was investigating precisely the topics

on which Callipari testified during his interview with the SEC,

most significantly who was responsible for Connolly's trades. He

was aware that an investigation was underway, testified as part of

that investigation, and very well knew the nature and objective of

the investigation. Aguilar, 515 U.S. at 599 (suggesting that

knowledge of a pending judicial proceeding confers an intent to

obstruct). Since the jury found him guilty of the conspiracy and

at least for making false or misleading statements as to the

obstruction count, Callipari is hard pressed to argue that the jury

would not have convicted him of obstruction had the court given his

Requested Instruction #45. Accordingly, even assuming the district

court erred in declining to include the "natural and probable

effect" language, the error was harmless.

B. Sufficiency of the evidence

We now turn to the district court's denial of Callipari's

motion for judgment of acquittal on the obstruction count. We

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review Rule 29 determinations de novo. United States v. Moran, 312

F.3d 480, 487 (1st Cir. 2002). More specifically, we evaluate the

evidence in a light most favorable to the government, and "decide

whether that evidence, including all plausible inferences

extractable therefrom, enables a rational factfinder to conclude

beyond a reasonable doubt that the defendant committed the charged

crime." Gomez, 255 F.3d at 35; United States v. Czubinski, 106

F.3d 1069, 1073 (1st Cir. 1997). "The government may prove its

case entirely by circumstantial evidence and need not exclude very

reasonable hypothesis of innocence, provided the record as a whole

supports a conclusion of guilt beyond a reasonable doubt." United

States v. Waldeck, 909 F.2d 555, 559 (1st Cir. 1990).

Count Twelve in the indictment charged that nine portions

of Callipari's SEC testimony were false and misleading. The

district court granted Callipari's Rule 29 motion with regard to

his statement concerning his termination from Fidelity, and denied

the motion with regard to the remaining eight statements, which

concerned his payments to Srock and detailed Connolly's authority

to trade for his account. We review these eight portions of the

testimony.11

11
All eight need not survive our review. When a jury returns
a general verdict of guilty on a single count charging more than
one act, we must sustain the verdict as long as the evidence was
sufficient to support at least one of those acts. Griffin v.
United States, 502 U.S. 46, 56-57 (1991); United States v. Nieves-
Burgos, 62 F.3d 431, 434-36 (1st Cir. 1996). The district court's
instruction was consistent with this rule. Moreover, the evidence

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 1. Relationship with Srock

Callipari testified to the SEC,

Q. Did you have any monetary relationship with
Srock?
A. I paid Srock for clerical services. He
sent me a bill and I - and that's not unusual
because of the heavy volume on the floor. He
was, you know, checking all the trades in the
morning, I paid him.
Q. And -
A. He sent me a bill.
Q. Do you pay Srock or PTR?
A. I pay Srock for that.
Q. Do you have a written agreement?
A. No. He sent me a bill, I paid for it.
Q. What was the agreement?
A. He basically said, you know, he had to come
in real early because of all these trades and,
you know, there was a lot, you know, there was
a lot of work involved in the morning clearing
everything because we were very busy. And
that, you know, if I could give him some
money, I said, "Fine, send me a bill and I'll
pay you."

The indictment specified that this statement was false or

misleading because Callipari knew that "it was highly unusual to be

paying Srock directly," "the payments were for Srock to keep an eye

on Connolly's trades, and make sure they were not too large," and

"the payments to Srock were not for Srock to perform duties for

Callipari in the morning in connection with clearing trades," but

for Srock to make sure Connolly did not "go crazy."

As for the first allegation, Srock testified that he did

not send invoices to anyone but Callipari because he did not

here is sufficient to justify conviction on all eight of the acts
submitted to the jury. See text infra.

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perform "additional duties" for other clients. Three other

witnesses--Stephen Wolan, another PTR clerk; Richard Polcari, a

trader at Vandham Securities; and Joe Valenza–testified that

customers did not pay floor clerks directly for their services,

even if the clerks performed certain extra duties for these

customers. Customers negotiate contract adjustments and pay the

executing firm for this extra work.

As relevant to the second and third allegations, Srock

testified that throughout July 1997, Callipari asked him to monitor

Connolly's trading and that, later, he admonished Srock "to not let

Connolly go crazy."12 Srock regularly sent Callipari "trade cards"

on which Srock detailed the types and amounts of trades in which

Connolly engaged. In comparing it to Callipari's SEC testimony,

the jury could reasonably infer from Srock's trial testimony that

Callipari was fully aware of Connolly's potential to make excessive

trades and accordingly hired Srock, through whom Connolly conducted

the trades, to keep an eye on Connolly. The two even had a system

in place by which Callipari could track Connolly's activities. The

"clerical work"--preparation and faxing of lists detailing

Connolly's trades--was part and parcel of this system. The record

12
That Srock believed the size of Connolly's trades was not
"initially" relevant to his agreement with Callipari does not mean
that the jury could not have reasonably concluded that Callipari
himself was worried about what Connolly was capable of doing.
Otherwise, it is difficult to imagine why Callipari struck an
agreement with Srock specifically to monitor Connolly's trades.

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amply supports the conclusion that Callipari's stated reason for

the payments to Srock–clearing trades in the morning--was aimed at

misleading and impeding the SEC in its investigation.

2. Relationship with Connolly and authority over trades

The remaining seven portions of Callipari's SEC testimony

listed under Count 12 (see Attachment) deal with the week of

September 15, 1997, and Callipari's contention that he told

Connolly "no trading" for that week. His recorded conversation

with Srock on the afternoon of that Monday, however, belies his

claim and gave the jury more than enough reason to find his

statements to the SEC obstructive. Callipari neither expressed

surprise at the activity in his account nor rejected any trades

when Srock told him about them on Monday afternoon. Instead, he

inquired of Srock whether these trades were profitable.

Additionally, by the fact that Callipari intimated to Srock that he

would later call Connolly, the jury could easily infer that

Callipari knew these trades had been made by Connolly as part of

the conspiracy and that he never prohibited Connolly from trading

in his JAS account.

Callipari also testified to the SEC that, when he learned

of Connolly's trading on Monday, he told Connolly that he refused

the trades and that those trades marked the end of their business

relationship. Connolly, however, testified at trial that Callipari

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ordered him to take a position on another series of options in

order to hedge against losses.

Finally, Callipari stated that he had not authorized any

of Connolly's trades after the August 14, 1997 incident. Connolly

nevertheless placed trades in Callipari's account all throughout

the latter half of August. And again, Callipari accepted

Connolly's September 15 and 16 trades into his account and then

tried to "free-ride" by demanding that Fidelity take back as

"unauthorized" the big losing trade of that week.

Considering the totality of the record, and the

inferences to be drawn therefrom in the light most favorable to the

verdict, we affirm the district court's denial of Callipari's

motions for judgment of acquittal.

IV. SENTENCING

At sentencing, the district court attributed $428,000 to

Callipari, which was the total loss Connolly incurred from trading

on Monday, September 15 and Tuesday, September 16, 1997. The court

stated, however, that Callipari was responsible only for the amount

which had been lost on Monday, which Callipari claims was only

$87,000. The government contends that the court properly

determined the amount to be $428,000.

A sentencing court's valuation of loss is reviewed for

clear error. United States v. Henry, 136 F.3d 12, 23 (1st Cir.

1998).

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 To recapitulate, Connolly made two large trades during

the week of September 15, 1997. On the morning of Monday the 15th,

Connolly sold 255 put options in the Sep 900 series for a total of

$302,437.50. On Monday afternoon, Connolly hedged the morning

trade by purchasing 255 put options in the Sep 905 series for

$488,250.00. He "undid" the hedge Tuesday morning by buying back

255 put options in the Sep 900 series. Throughout Wednesday,

Callipari himself sold the Sep 905 puts through Srock, which had

been exposed to market risk by the "undoing" of the hedge, for

$59,937.50, resulting in a loss of $428,312.50. As for the other

large trade, Connolly made a $248,250 profit on the purchase of

another set of Sep 900 puts and sent it to Callipari. The net loss

on the two trades was $180,062.50 ($428,312.50 loss offset by the

$248,250.00 profit). Callipari's $87,000 figure comes from what

the net loss would have been had he and Connolly closed the

positions on both trades at the end of the day on Monday.

Accordingly, he argues, he should be sentenced only for the loss

that "occurred" on Monday.

At sentencing, the court concluded that in ordering

Connolly to hedge,

Callipari was really attempting to limit the
losses here, not necessarily out of any regard
for Fidelity, but for his own situation
because once those losses became so great that
even he couldn't take them or pass them off to
JAS or any of the other parties who were
involved in these transactions, the game was
going to be up, and he clearly knew that.

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The court continued,

I believe that the evidence in the case shows
that he thought that was the end of it. And
while he may have had some feelings that
Connolly would go off and continue doing the
kinds of trading that he did over the next two
days, I do not believe the Government has
sustained its burden with respect to the total
amount of loss here, that is, the $2.39
million. . . . [W]hen Connolly the next day
decided on his own to pull that leg off and
then, as he said, went nuts, he kept Callipari
in the dark, I think that the appropriate loss
figure here is the $428,000 loss figure at the
end of the day on Monday . . . but to try to
offset it with the profits that were made on
the other transactions just doesn't cut it
because those weren't given back until the
conspiracy was pretty much uncovered by Ms.
Curran.

Callipari suggests that from these observations, the

court itself agreed with his theory that the cause of the increase

in loss from $87,407.91 on Monday to $428,000 on Wednesday was

Connolly's "affirmative and unilateral act of removing" the hedge

Tuesday morning.

Under § 1B1.3 of the sentencing guidelines, "relevant

conduct" for sentencing purposes includes "all acts and omissions

committed, aided, abetted, counseled, commanded, induced, procured,

or willfully caused by the defendant." U.S.S.G. § 1B1.3(a)(1)(A).

In the case of a conspiracy, the court may consider "all reasonably

foreseeable acts and omissions of others in furtherance of the

jointly undertaken criminal activity" in determining a sentence.

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Id. § 1B1.3(a)(1)(B). In addition, "all harm that resulted from

the acts and omissions specified in subsections (a)(1) and (a)(2)

above, and all harm that was the object of such acts and omissions"

constitutes "relevant conduct." Id. § 1B1.3(a)(3).

The district court never concluded that Callipari's part

in the conspiracy was over by Monday's end. In fact, it

specifically found that the hedge was aimed at limiting his losses

to a manageable amount, and not Fidelity's, in order to maintain

the viability of the conspiracy. Given how the court characterized

Callipari's conduct for the entire week, its statement that the

loss ended on Monday cannot reasonably be taken to mean that he was

done or had withdrawn from the conspiracy at market's close on

Monday.

The court stated that the theory behind the $87,000

figure did not "make sense." It understood that the $428,000

figure represented the loss caused by Monday's trades, not the

change in the market value of the options by the end of trading on

Monday. Moreover, the court's refusal to offset the loss with the

profitable Monday trade indicates its view of the $428,000 figure

as encompassing the entire week, and not just until the end of

Monday. We disagree with what Callipari seems to deem the district

court's confusion on the issue and find no error with the court's

assessment of Callipari's relevant conduct for sentencing purposes

-51-
and the loss amount attributable to Callipari by his own actions as

well as the actions of Connolly, his co-conspirator.

V. CONCLUSION

For the reasons stated above, we affirm Callipari's

conviction and sentence.

-52-
 ATTACHMENT

The following seven excerpts from Callipari's February

11, 1998 testimony before the SEC are the subject of Part III.B.2

of the opinion. They are labeled (c) through (i) in accordance

with the indictment.

(c)
A. . . . There was a Monday night that I had
spoken to Mr. Connolly, and he wanted to do a
trade and I specifically told him that he was
not to do any more trades for me because of a
couple of prior problems, and that we would
no longer do business together.
Q. Okay. Stop right there. On a Monday, in
September?
A. Yes. That was the - I don't have a
calendar. It was the 15th? 16th? Refresh
my memory, do you know what day it was?
Anybody have a calendar?
***
A. And Mr. Connolly called me and asked to do
trades after I told him that he was not to do
any more trading for my account because of a
prior incident.

(d)
A. . . . Then on the Monday, I told Mr. - he
called, Mr. Connolly, saying that he wanted to
trade. I told him, "No. You can't trade for
me anymore." He said please, I says, "No.
I'm going out to lunch. And then after that
I'm coming back, and after that I'm taking the
rest of the week off and I'll be on vacation."

(e)
Q. Is this on the Monday?
A. Yes, this was on the Monday.
Q. And you were still in your office in Rhode
Island at noon?
A. Yeah, I was gone for a period of time but I
came back.

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 Q. Okay.
A. And then T.J. [Connolly] called me, he told
me he had these puts that he had done. I told
him I'm not doing it, you better cover it and
tell Fidelity you have an error and tell them
what you did.

(f)
Q. Between 9/20 and 9/11, did [Connolly]
contact you to get orders?
A. No. But he did on the 15th, that Monday,
he tried to get an order from me and I told
him no. I remember that day - that I remember
telling him on that Monday morning, I says,
"No. I'm going to lunch, I'm taking the rest
of the week out, you are not - not - you are
banned from trade. You are not to do
nothing."

(g)
Q. Okay. So the next time you talked to
[Connolly] after the 11th is when, the 15th?
A. I would assume, yes, that's the 15th? That
was that Monday, yes.
Q. And he calls - your previous testimony is
that [Connolly] called you, he wanted to do a
trade and you said no?
A. No, I told him absolutely not.
***
Q. And did he - was he specific about what
trade he wanted to do? Did he have something
in mind?
A. He told me he wanted to either short or get
long in the market because of something. And
I told him no, there is no more trading. I
told him that there's no more O.E.X. trading.
There is nothing. To stop.

(h)
Q. And you did not authorize any trades to JAS
account with [Connolly] on the 11th or the

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 15th or the 16th of September, is that your
testimony?
A. Yes, that's my testimony.
Q. Okay, on the 15th, did you accept any
trades for the 15th? Did you say, "Okay, I'll
cover these trades," at any time?
A. Did I say I would cover them?
Q. Mm-hmm.
A. No, I don't - um, he went - when I called
Tony [Srock], he said, "You're not gonna like
what's done." See but T.J. was lying to me.
He was telling me things were covered. They
weren't covered. You know, there was a lot of
- nobody was really telling me what was going
on at that point.
Q. On the 15th did you accept any of the
trades?
A. I - not to my recollection did I accept any
of those trades.
Q. What about on the 16th?
A. Not to my recollection, no.

(i)
Q. Now, these other trades that Silk [Curran]
and Srock are referring to, are these the
trades that, um, you're on the hook for in
the Fidelity complaint?
A. That's what they're trying to blame, yeah.
They're trying to blame me for those trades.
It's 2 point something million dollars they're
looking for.
Q. And these were trades that they claim you
authorized Connolly to make for you?
A. Yes.
Q. And it's - and your position is you didn't?
A. Didn't. Did not, didn't, didn't. Swear in
front of God, bibles, whatever you want, I did
not authorize those trades. That was totally
him. I did not authorize those trades. After
the August incident, in the teens there,
whatever dates they were, he was - anything he
did was unauthorized.

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