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Sometimes the Battle Isn’t Over Even When It’s Over

Ryan C Childress

Sometimes the Battle Isn’t Over Even When It’s Over
PM Images via Getty Images

On February 20, 2024, a federal judge in New York overturned the convictions of two professionals who, in connection with their cooperation with the investigators, had pleaded guilty to defrauding the Securities and Exchange Commission under the wire-fraud statute. The statute applies to conspiracies “intending to devise any scheme . . . for obtaining money or property . . .” [emphasis added].

To support the convictions of the two professionals, the government cited the theft of confidential information learned as a result of the professionals’ government positions, and the sharing of that information with their subsequent private employers. But, after the professionals had been convicted based on their guilty pleas, sentenced to probation, and fined, the Second Circuit expressly exonerated their alleged co-conspirators from the same crime under the same facts. Specifically, the Second Circuit ruled that “intangible regulatory information is not ‘property’ within the meaning of” the wire fraud statute. Thus, under the newly announced interpretation of the law, the professionals’ conduct no longer supported their convictions for wire fraud. Seeing the inequity of two cooperating witnesses being punished for conduct that was later determined to be legal, the professionals, through their attorneys, petitioned the court for an extraordinary writ of coram nobis (“the error before us”). The attorneys, jointly with the prosecutors, sent a letter to the judge seeking the writ due to a change in governing law. Subsequently, the judge vacated the convictions via writs of coram nobis.