United States v. Hayward
Opinion of the Court
SUMMARY ORDER
Defendant-Appellants Michael Hayward and Michael Stern appeal from judgments entered January 25, 2007, in the United States District Court for the Southern District of New York (Stein, J.), convicting them, following jury trials, of securities fraud in violation of 15 U.S.C. §§ 78j(b) and 78ff, 17 C.F.R. § 240.10b-5, and 18 U.S.C. § 2. We assume the parties’ familiarity with the facts, the procedural context, and the specification of appellate issues.
Defendants were specialists on the trading floor of the New York Stock Exchange (“NYSE”), responsible for executing trades in particular securities for NYSE customers in addition to trading for their firm’s “proprietary” accounts. See, e.g., In re NYSE Specialists Sec. Litig., 503 F.3d 89, 92 (2d Cir. 2007). Defendants were charged with violating the securities laws by trading for their proprietary accounts instead of matching executable buy and sell orders from NYSE customers—practices also implicating NYSE Rule 92(a), which prohibits a proprietary trade when the specialist “has knowledge of any particular unexecuted customer’s order to buy (sell) such security that could be executed at the same price.”
Finnerty compels the same result here. Both parties conceded that the evidence offered to convict Finnerty was largely indistinguishable from the proof submitted to convict Defendants. As in Finnerty, that evidence was insufficient to prove “deception.” As a result, Defendants’ convictions must be reversed.
Accordingly, for the reasons set forth above, the judgments of the district court are REVERSED.
Reference
- Full Case Name
- United States v. Michael Joseph HAYWARD and Michael Stern
- Cited By
- 1 case
- Status
- Published