Case: 08-20418 Document: 00511004221 Page: 1 Date Filed: 01/14/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
January 14, 2010
No. 08-20418 Charles R. Fulbruge III
Clerk
U.S. COMMODITY FUTURES
TRADING COMMISSION
Plaintiff-Appellant
v.
ANTHONY DIZONA
Defendant-Appellee
Appeal from the United States District Court
for the Southern District of Texas
Before REAVLEY, DAVIS, and BENAVIDES, Circuit Judges.
FORTUNATO P. BENAVIDES, Circuit Judge:
This civil appeal stems from a suit alleging violations of the Commodity
Exchange Act, 7 U.S.C. §§ 1 et seq. (2002). The United States Commodity
Futures Trading Commission (“the Commission”) brought this suit against
Anthony Dizona, a commodities trader on the West Trading Desk of Coral
Energy Resources, L.P. (“Coral”). The jury found that Dizona had attempted to
manipulate the market price of natural gas in interstate commerce in violation
of 7 U.S.C. § 13(a)(2). The jury, however, rejected the allegation that Dizona had
knowingly delivered false reports that tended to affect the market price of
natural gas in violation of § 13(a)(2). Both parties filed a motion for judgment
Case: 08-20418 Document: 00511004221 Page: 2 Date Filed: 01/14/2010
No. 08-20418
as a matter of law. The district court granted Dizona’s motion and denied the
Commission’s motion. The Commission now appeals the judgment, contending
that the district court erred in granting Dizona’s motion for judgment as a
matter of law and as a result, the jury’s verdict as to the attempted manipulation
charge should be reinstated. The Commission also argues that the district court
erred in denying the Commission’s motion for judgment as a matter of law and
that it is entitled to a new trial on the charge of knowing delivery of false
reports. Finding no reversible error, we AFFIRM.
I. FACTUAL AND PROCEDURAL HISTORY
The Commission is an independent federal regulatory agency that is
charged with enforcing the provisions of the Commodity Exchange Act. The
Commission filed a complaint for injunctive and other equitable relief in federal
district court, alleging that six individuals—an analyst and five traders
employed by Shell Trading Gas and Power Company—had engaged in acts that
violated the Act. The defendants were in the business of buying and selling
natural gas for profit on behalf of the West Desk at Coral in Houston, Texas.
The traders on the West Desk traded natural gas at several locations in the
western part of the United States. Denette Johnson was the head of the West
Trading Desk at Coral. Dizona, Courtney Moore, John Tracy, and Robert Harp
were all traders on the West Trading Desk at Coral. Kelly Dyer was an analyst
on the West Trading Desk.
The complaint alleged that from October 2001 through June 2002, the
defendants entered into transactions calling for the delivery of natural gas on
behalf of Coral. The transactions at issue are called “physical” trades of natural
gas in interstate commerce. Physical trades require the delivery of a specific
amount of natural gas on agreed upon days during the following month. The
price of a physical trade is either agreed upon at the time of the trade, a “fixed
price” or set by a published index, called an index price. The defendants’ duties
2
Case: 08-20418 Document: 00511004221 Page: 3 Date Filed: 01/14/2010
No. 08-20418
included reporting the price and volume data of their trades to reporting services
that generated natural gas price indices, such as Inside FERC Gas Market
Report (“IFERC”) and Natural Gas Intelligence (“NGI”). These publications
would solicit this data during “bidweek,” which was generally the last five
business days of a month. The editors of these publications would receive the
data from the traders and perform an analysis on the data. Based upon their
analysis, the editors would determine an index price. An index price is the
editor’s “opinion of a value that would represent a central value for natural gas
during that bidweek period in that market.”
The Commission alleged that the defendants submitted price and volume
data to IFERC and NGI that was not based on actual trades. Thus, the
Commission charged that the defendants knowingly delivered price and volume
data to the reporting services that was knowingly false or inaccurate in violation
of § 13(a)(2). The Commission further charged that the purpose of this false
reporting was to attempt to manipulate the natural gas price indices in violation
of § 13(a)(2). Five of the six defendants settled with the Commission prior to
trial, leaving Dizona as the only remaining defendant.
At the jury trial, the Commission put on evidence that, during bidweek of
each month, the traders would send Dyer their “mark,” which was each trader’s
estimate as to what the index price would be the following month. After
receiving the traders’ marks, Dyer would send an email to the traders that had
a chart with information about the delivery locations. For each delivery location,
the trader’s mark (estimated price) was listed in the first column and the next
two columns indicated whether a higher (“Up”) or lower (“Down”) index price
would be “Good” or “Bad” for the West Desk’s book. Attached to this email was
a spreadsheet for the traders to input their trade data for all fixed-price baseload
trades to be reported to IFERC and NGI. This spreadsheet, which was a shared
document on the West Desk’s computer network, was circulated by email from
3
Case: 08-20418 Document: 00511004221 Page: 4 Date Filed: 01/14/2010
No. 08-20418
trader to trader. After all the traders input their trade data, the spreadsheet
was sent by facsimile to IFERC and NGI. The editors of the publications would
perform an analysis on the data reported by the traders and determine the index
price.
The bulk of the Commission’s evidence had been produced by Coral
pursuant to a subpoena and was admitted at trial through the Commission’s
investigator as a summary witness, Mary Kaminski, who summarized the
voluminous exhibits. To show that Dizona attempted to manipulate the market,
Kaminski compared the trading data Dizona input into the monthly
spreadsheets that were sent to the natural gas publications with the trade data
listed in Exhibit 27. Exhibit 27 was a spreadsheet that the Commission asserted
contained the actual trading data for the relevant time period. Kaminski
testified that her comparison of the data revealed that 300 of the 304 natural
gas trades reported to the publications for Dizona’s assigned trading locations
were not “actual” Coral trades.
The Commission also called an expert, Dr. Elud Ronn, a finance professor
at the University of Texas and an expert in the field of energy finance. Dr. Ronn
was retained to determine whether there was a bias in the traders’ reporting
procedure at the West Desk and whether it was “systematic in nature.” Dr.
Ronn testified the West Desk reported in a way that would positively affect
Coral’s earnings, as indicated by Dyer’s “good” indicators, approximately 81
percent of the time. In other words, the bias was in the direction suggested by
Dyer’s email message that indicated whether the “up” or “down” price movement
would be “good” or “bad.” Dr. Ronn found that the inaccurate data consistently
skewed in Coral’s favor showed bias. In addition, Dr. Ronn testified that the
volume of natural gas reported was higher than the volume actually traded. Dr.
Ronn determined that the “excess [trading volume] reported was anywhere from
4
Case: 08-20418 Document: 00511004221 Page: 5 Date Filed: 01/14/2010
No. 08-20418
80 to several hundred percent.” 1 On cross examination, Dr. Ronn clarified that
his “report was for the West Trading Desk as a whole. The numbers that I
reported this afternoon were specific to the locations of the defendant.” The
delivery locations Dr. Ronn examined were the locations at which Dizona traded.
Additionally, the Commission submitted two audiotapes of phone calls in
which Dizona was discussing trade data that he would report to the index
compilers. On one audiotape, Dizona spoke of reporting trade data to IFERC,
responding, “I’m reporting the indexes.” On another audiotape, Dizona talked
to Carol Taylor, a trader in Canada, asking where she wants the price, and she
responded “low.” Dizona then laughed and asked if “a dollar fifty would be great
for you?” He further stated, “Let me test our book and if, if, if I can report it low
for you I will.” Taylor responded, “That would be great because we don’t have
enough to even report this month unfortunately.” To which Dizona responded,
“You can make it up, can’t you?’ Taylor said, “We can, but we don’t feel right
about that.” Dizona then said, “Oh, you crazy Canadians.” At one point, Dizona
said he would help her and be her “immoral person,” apparently by reporting a
low trade. He also referred to “Houston,” which was where he was located, as
doing the “dirty work for [her].”
Dizona did not testify or call any fact witnesses. He did call Professor
Joseph Kalt, an economic consultant and expert in natural gas and oil. Professor
Kalt testified that he looked for bias between what Coral reported and the actual
prices in the market. He testified that any difference between the West Desk
reporting and the index compiler’s average was “less than a penny of the average
in the market.” His opinion was that the prices reported on the Coral
spreadsheet were “all right in the range of everybody else” in the market.
1
Indeed, “[t]here was actually one case when the excess was 2000 percent” higher than
actual Coral trading volumes.
5
Case: 08-20418 Document: 00511004221 Page: 6 Date Filed: 01/14/2010
No. 08-20418
During the jury’s deliberations, it sent out a note to the court inquiring:
“In question no. 1 does ‘knowingly delivered for transmission’ mean that he
[Dizona] provided information to be transmitted or that he made the actual
transmittal?” In response, the court directed the jury to return to the pertinent
part of the instructions. The jury subsequently found that Dizona had not
knowingly delivered a false report pursuant to question one. The jury did,
however, find that Dizona had attempted to manipulate the market price of
natural gas on eight occasions.
Both parties filed motions for judgment as a matter of law. The district
court granted Dizona’s motion and set aside the jury verdict finding that he had
attempted to manipulate the market price of natural gas in violation of §
13(a)(2). The district court denied the Commission’s motion. The Commission
now appeals.
II. SUFFICIENCY OF THE EVIDENCE
A. Attempted Manipulation
The Commission contends that the district court erred in granting
Dizona’s motion for judgment as a matter of law. This Court reviews a district
court’s grant of judgment as a matter of law de novo, applying the same legal
standard as the district court. Price v. Marathon Cheese Corp., 119 F.3d 330,
333 (5th Cir. 1997). Judgment as a matter of law is appropriate after “a party
has been fully heard on an issue during a jury trial and the court finds that a
reasonable jury would not have a legally sufficient evidentiary basis to find for
the party on that issue.” Fed.R.Civ.P. 50(a). “In evaluating such a motion, the
court must consider all of the evidence in the light most favorable to the
nonmovant, drawing all factual inferences in favor of the non-moving party, and
leaving credibility determinations, the weighing of evidence, and the drawing of
legitimate inferences from the facts to the jury.” Price, 119 F.3d at 333.
Although the court “should review the record as a whole, it must disregard all
6
Case: 08-20418 Document: 00511004221 Page: 7 Date Filed: 01/14/2010
No. 08-20418
evidence favorable to the moving party that the jury is not required to
believe”—that is, the Court “should give credence to the evidence favoring the
nonmovant as well as that evidence supporting the moving party that is
uncontradicted and unimpeached, at least to the extent that that evidence comes
from disinterested witnesses.” Reeves v. Sanderson Plumbing Prods., Inc., 530
U.S. 133, 151 (2000) (internal quotations omitted).
The Commission argues that the district court erred in setting aside the
jury’s verdict that Dizona had attempted to manipulate the market price of a
commodity in interstate commerce in violation of 7 U.S.C. § 13(a)(2). Section
13(a)(2) forbids “[a]ny person to manipulate the market or attempt to
manipulate the price of any commodity in interstate commerce.” The jury found
that, on eight occasions, Dizona had attempted to manipulate the market price
of natural gas in interstate commerce.
The district court set aside the verdict, finding, among other things, that
the evidence did not prove that Dizona committed an act that violated §13(a)(2);
instead, it stated that the evidence demonstrated that Dizona was simply giving
in-house estimates to his superiors. The Commission sharply disputes this
characterization of the evidence. Although the Commission acknowledges that
Dizona provided Dyer his in-house estimates, which are his trader’s marks on
prices, those estimates were not the basis for the charge of attempted
manipulation. The Commission asserts that the evidence shows that after Dyer
received the traders’ marks, she would respond by email with index directions
(“good” and “bad”). The charge is that, after receiving the index directions,
Dizona would report biased price and volume trade data with respect to his
natural gas trades in accordance with Dyer’s directions. The Commission
further asserts that this data was labeled and intended to be treated as actual
trade data—not as in-house estimates.
7
Case: 08-20418 Document: 00511004221 Page: 8 Date Filed: 01/14/2010
No. 08-20418
The Commission contends that there is a wealth of evidence to support the
jury’s verdict. The Commission asserts that “Dizona’s reported trades were
almost always false and were consistently biased in favor of price changes that
would profit his employer.” The Commission points to the audiotape of Dizona
volunteering to falsify trade data for Carol Taylor, a trader in Canada. The
Commission relies on Kaminski’s testimony that a comparison of the trading
data contained in trial exhibit 27 with data reported to the natural gas
publications revealed that most of the reported data was false. The Commission
also relies on a “forensic e-mail trail” demonstrating Dizona’s role in submitting
the data and its proffer of Dizona’s interrogatory admissions that he sent trading
data to the index compilers.
In response, Dizona counters that the district court did not err in granting
his motion for judgment as a matter of law because there was insufficient
evidence to sustain the jury’s verdict once the hearsay evidence has been excised.
Dizona contends that certain exhibits the Commission submitted into evidence
constitute hearsay and that this objection was preserved in district court. As
Dizona asserts, “in deciding whether [a judgment as a matter of law] should
have been awarded, [we] must first excise inadmissible evidence; such evidence
‘contributes nothing to a legally sufficient evidentiary basis.’” Hodges v. Mack
Trucks, Inc., 474 F.3d 188, 193 (5th Cir. 2006) (quoting Weisgram v. Marley, 528
U.S. 440, 454 (2000)). Thus, we must determine whether the evidence was
properly admitted before the jury. We review a district court’s evidentiary ruling
for abuse of discretion. United States v. Dixon, 132 F.3d 192, 197-98 (5th Cir.
1997).
It is undisputed that Coral produced the evidence in question pursuant to
a subpoena issued by the Commission. Exhibits numbered 17 through 24
included the emails from the analyst to the traders and the emails forwarding
the attached spreadsheet with their reported trades and their marks. Exhibit
8
Case: 08-20418 Document: 00511004221 Page: 9 Date Filed: 01/14/2010
No. 08-20418
27 is an Excel spreadsheet that Coral produced in response to a subpoena for the
record of Coral’s trades during the relevant time period. 2 During a pretrial
hearing, Dizona objected to the admission of these exhibits, asserting that the
Commission had failed to demonstrate that the evidence met the business
records exception to the hearsay rule pursuant to Rule 803(6) of the Federal
Rules of Evidence. Dizona’s counsel objected as follows: “We contend they are
not business records. They were not kept in the ordinary course of business.
They were not kept by someone. They don’t meet any of the criteria of [Rule]
803(6) or (7).” The district court responded: “I might agree with you, but I don’t
think that’s the criteria for admission and that’s why I’ve overruled it.”
Although it is clear that the district court overruled the hearsay objection, the
basis for admission is unclear.3 Subsequently, at trial, Dizona objected to
Exhibit 27 during the testimony of Mary Kaminski. Dizona’s counsel again
objected based on hearsay and relevance. During a conference at the bench, the
court inquired regarding who compiled the document, and the Commission’s
attorney asserted that Coral’s information technology department compiled
Exhibit 27. Dizona’s attorney responded, countering “No, it was not, your
Honor.” 4 The court then stated “let’s just assume that that’s true.” The
Commission’s attorney then stated that: “Coral maintains a database of trades
and that system is, I believe, the Endure system. And in order to develop this
2
Exhibit 28 was also an Excel spreadsheet, but the trade data in that exhibit did not
involve the trades at issue in this trial.
3
In its reply brief, the Commission argues that “many of the documents produced by
Coral were admissible on grounds other than the business records exception to the hearsay
rule.” However, we note that the Commission does not set forth any specific ground that
would allow for admission of Exhibit 27 except that it fell under the business records exception
or that it was not offered to prove the truth of the matter asserted.
4
We note that, after Dizona’s challenge to the Commission’s attorney’s explanation
of how Exhibit 27 was created, the Commission offered no evidence to establish that the
requirements of Rule 803(6) had been met.
9
Case: 08-20418 Document: 00511004221 Page: 10 Date Filed: 01/14/2010
No. 08-20418
Excel spreadsheet, they downloaded information directly out of Endure into this
Excel spreadsheet.” The attorney’s assertions appear to attempt to lay the
foundation for admission based upon the business records exception to the
hearsay rule under Rule 803(6). However, as Dizona has argued, counsel’s
assertions do not constitute evidence and thus cannot lay the foundation for Rule
803(6).
Dizona asserts that because the Commission did not call a Coral employee
with personal knowledge to establish the documents as business records under
Rule 803 of the Federal Rules of Evidence, the evidence was hearsay. With
respect to Rule 803(6), “[t]he exception requires that either the custodian of the
business records or ‘other qualified witness’ lay a foundation before the records
are admitted.” United States v. Brown, 553 F.3d 768, 792 (5th Cir. 2008).
However, “[t]here is no requirement that the witness who lays the foundation be
the author of the record or be able to personally attest to its accuracy.” Id.
(footnote and internal quotation marks omitted). “A qualified witness is one
who can explain the record keeping system of the organization and vouch that
the requirements of Rule 803(6) are met.” Id. (footnote and internal quotation
marks omitted). Rule 803(6) provides, in pertinent part, that:
A memorandum, report, record, or data compilation, in any form, of
acts, events, conditions, opinions, or diagnoses, made at or near the
time by, or from information transmitted by, a person with
knowledge, if kept in the course of a regularly conducted business
activity, and if it was the regular practice of that business activity
to make the memorandum, report, record or data compilation, all as
shown by the testimony of the custodian or other qualified witness,
. . . unless the source of information or the method or circumstances
of preparation indicate lack of trustworthiness.
10
Case: 08-20418 Document: 00511004221 Page: 11 Date Filed: 01/14/2010
No. 08-20418
In the case at bar, Kaminski, the Commission’s investigator, testified only
as a summary witness.5 Kaminski did not interview any Coral employee or have
any knowledge regarding the keeping of the records. On cross examination,
Kaminski admitted that she did not know whether the spreadsheet was made
at or near the time of the trade. She also admitted that she did not know
whether the spreadsheet was made by a person with knowledge of the trade.
She had no information about how the record was produced. Kaminski testified
that her only previous experience with natural gas commodities was as a broker
trading these commodities over the phone. Indeed, she had never investigated
an irregularity in natural gas trading during her time with the Commission.
Moreover, the district court instructed the jury that Kaminski’s testimony “is not
independent evidence of the subject matter and is only as valid and reliable as
the underlying admitted evidence it purports to summarize.” Under those
circumstances, Kaminski, in her role as a summary witness, was not a qualified
witness who could explain Coral’s record keeping system and vouch that the
requirements of the rule had been met. See Brown, 553 F.3d at 792-93
(explaining that although the expert witness had undisputed knowledge and
expertise with respect to the business’s computer program, the expert was not
a qualified witness under Rule 803(6) because he had no knowledge of the
business’s record keeping procedures or practices). We therefore conclude that
the exhibits were not properly admitted under Rule 803(6).6
5
This Court has found the use of a summary witness appropriate in complex cases to
summarize voluminous records. E.g., United States v. Ollison, 555 F.3d 152, 162 (5th Cir.
2009).
6
We recognize that a government agent can serve as a “qualified witness” for purposes
of Rule 803(6). E.g., United States v. Veytia-Bravo, 603 F.3d 1187, 1191-92 (5th Cir. 1979).
Nonetheless, to be a qualified witness the government agent must still be able to explain the
record keeping system and vouch that the requirements of the rule had been met. See id.
(explaining that the requirements of Rule 803(6) were met by the agent’s testimony that the
records were compiled pursuant to regulations that required the dealer to make a
contemporaneous record of each sale as part of its regular course of business). See also Conoco
11
Case: 08-20418 Document: 00511004221 Page: 12 Date Filed: 01/14/2010
No. 08-20418
Nonetheless, in its reply brief and at oral argument before this Court, the
Commission asserted that because it did not rely on the evidence to establish the
truth of the matter asserted, the evidence did not constitute hearsay. More
specifically, the Commission asserted that the entries Dizona made in the
spreadsheets in Exhibits 17 through 24 were false and thus, it was not offering
those exhibits to prove the truth of the matter asserted. However, even
assuming arguendo that assertion is correct, it does not apply to Exhibit 27, the
spreadsheet that Coral produced in response to a subpoena for information
regarding trades during the relevant time period. Kaminski compared the
“actual” trade data in that spreadsheet with the data reported to the natural gas
publications to demonstrate that Dizona had submitted false information.
Indeed, in its brief, the Commission contends that there is a “wealth of evidence”
that supports the jury’s verdict, stating that “[t]here was the comparison of the
trading data contained in . . . Exhibit 27 . . . with Coral’s reported data to
InsideFERC and NGI.” Therefore, contrary to the Commission’s assertion,
Exhibit 27 was offered for to prove the truth of the matter asserted.
We recognize that prior to trial the Commission filed a motion requesting
the district court to find that Dizona had waived his objections to the
authenticity of the Commission’s exhibits. Pursuant to Southern District Local
Rule 44.1, the district court found that Dizona had waived his authenticity
v. Dept. of Energy, 99 F.3d 387, 391 (Fed. Cir. 1996) (explaining that “as long as the witness
understands the system used to prepare the records,” the witness is qualified to lay the
foundation for the admission of records under Rule 803(6)). In the instant case, the record is
entirely devoid of such testimony and thus the necessary predicate was not laid for admission
of Exhibit 27.
12
Case: 08-20418 Document: 00511004221 Page: 13 Date Filed: 01/14/2010
No. 08-20418
objections.7 However, we do not interpret the district court’s ruling as finding
that the exhibits had been authenticated for purposes of Rule 803(6).8
In any event, in the context of Rule 803(6), this Court has explained that
“authentication alone is not enough.” United States v. Robinson, 700 F.2d 205,
210 (5th Cir. 1983). In Robinson, the defendant objected to the admission of
handwritten notes that had been taken during a county board of supervisors
meeting. Id. The notes had been introduced along with a packet of county
documents through the county records custodian. Id. This Court explained
that, although the notes had been properly authenticated, “[f]or the notes to be
admissible under Rule 803(6), the government also had to establish that ‘it was
the regular practice of that business activity’ to have the notes made.” Id.
(quoting Rule 803(6)). Because the government failed to do so, this Court found
that the notes should not have been admitted. Id. In the instant case, there
was no showing that it was Coral’s regular practice to make Exhibit 27.
Accordingly, the authentication ruling standing alone is insufficient to meet the
requirements of Rule 803(6). We therefore conclude that the district court
abused its discretion in admitting Exhibit 27.
We must now determine whether the evidence is sufficient to support the
jury’s verdict without considering Exhibit 27. As previously set forth, in addition
to the summary witness’s testimony, the Commission called Dr. Ronn as an
expert who testified that the West Desk reported in a way that would positively
7
See S.D. L.R. 44.1 (“A party requiring authentication of an exhibit must notify the
offering party in writing within five days after the exhibit is listed and made available.
Failure to object in advance of the trial in writing concedes authenticity.”).
8
When Dizona’s counsel objected to the exhibits because they were not kept in the
ordinary course of business and thus did not meet the requirements of Rule 803(6), the
district stated: “I might agree with you, but I don’t think that’s the criteria for admission and
that’s why I’ve overruled it.” The court’s response does not indicate that it was admitting the
exhibits under Rule 803(6). Clearly, the hearsay objection based on Rule 803(6) was not
waived.
13
Case: 08-20418 Document: 00511004221 Page: 14 Date Filed: 01/14/2010
No. 08-20418
affect Coral’s earnings, as indicated by Dyer’s “good” indicators, approximately
81 percent of the time. On cross examination, when specifically asked whether
he had analyzed Dizona’s individual trades, Dr. Ronn responded: “In my
testimony this afternoon, those locations were the trading locations for which the
defendant was responsible. So, I don’t know if that’s responsive to your question
or not.” Dr. Ronn further explained that his “report was for the West Trading
Desk as a whole. The numbers I reported this afternoon were specific to the
locations of the defendant.” It appears that to the extent that Dr. Ronn
considered the individual traders’ data, he grouped Dizona’s and Harp’s trades.
Indeed, Dr. Ronn testified that although he attributed certain trades to Dizona,
he was “not exactly clear on the relationship of Mr. Harp and Mr. Dizona. I have
a sense that they worked together, and so that sense is what caused me to put
this together as I did in Table 4.” When asked whether he could “tell this jury
whether this gentleman that’s on trial here made any entry onto a spreadsheet,”
Dr. Ronn responded that he “cannot.”
Additionally, as previously set forth, the Commission submitted two
audiotapes of phone calls in which Dizona was discussing trade data that he
would report to the index compilers. Dizona’s statements on the audiotape are
incriminating but too vague to sufficiently support the jury’s finding that he
attempted to manipulate the price of natural gas on eight occasions. Under our
de novo review, we are not persuaded that Dr. Ronn’s general finding of biased
reporting at Coral’s West Desk and Dizona’s incriminating statements on the
audiotape are sufficient to demonstrate that Dizona made false entries into the
spreadsheets that were sent to the publications. With this evidence alone, the
Commission cannot show that Dizona attempted to manipulate the market price
of natural gas in violation of § 13(a)(2). Thus, we affirm the district court’s
judgment vacating the jury’s verdict with respect to the attempted manipulation
charge.
14
Case: 08-20418 Document: 00511004221 Page: 15 Date Filed: 01/14/2010
No. 08-20418
B. Delivery of False Reports
As previously set forth, the jury rejected the allegation that Dizona had
knowingly delivered false reports that tended to affect the market price of
natural gas in violation of § 13(a)(2). The Commission’s theory was that Dizona
sent the spread sheets containing the false trades to the natural gas
publications. After the verdict, the district court denied the Commission’s
motion for judgment as a matter of law. As discussed in section II. A, supra,
Exhibit 27 was inadmissible hearsay. Without the evidence of the actual trades
in Exhibit 27, the evidence is insufficient to demonstrate that Dizona had
knowingly delivered false reports that tended to affect the market price of
natural gas in violation of § 13(a)(2). Thus, we affirm the district court’s
judgment refusing to overturn the jury verdict with respect to the delivery of
false reports charge.9
For the foregoing reasons, the district court’s judgment is AFFIRMED.
9
Although the Commission raises other arguments, in view of our finding that the
evidence was insufficient to sustain either charge, we need not reach the remaining
arguments.
15
Case: 08-20418 Document: 00511004221 Page: 16 Date Filed: 01/14/2010
No. 08-20418
REAVLEY, J., Dissenting:
I would render judgment of conviction on the basis of the jury verdict. The
defendant argues for the acquittal, and the panel majority so holds, principally
because of the inadmissibility of Exhibit 27 as business record hearsay. The
district court admitted Exhibit 27 into evidence, and I see that as no abuse of
discretion.
This exhibit was produced by the defendant’s employer in response to the
government’s subpoena to deliver the record of its trades. The Commission
moved prior to trial requesting waiver by defense to the authenticity of the
exhibit, and the court ruled objections were waived.
The Commission’s experienced investigator explained that the practice
was for defendant as the trader to transmit his trade data to become the values
shown on Exhibit 27. The defendant received the database made from his
e-mails, and the database was downloaded into Exhibit 27. While this witness
did not have personal knowledge of details of operation of this particular
company, there was no evidence disputing this explanation.
There was no contention or evidence from defendant that there was any
impropriety or error in the trading values shown in Exhibit 27.
16
Case: 08-20418 Document: 00511004221 Page: 17 Date Filed: 01/14/2010
No. 08-20418
The trial was perfectly fair and the proof of this exhibit was accepted and
acceptable. No precedent requires this panel ruling. I regard it as a misuse of
the rules of evidence and dissent.
17