open market pump and dump scheme when he pled guilty expected and agreed to certain consequences of that plea he understood that he would be going to jail likely for forty one to fifty one months he understood that he would have to forfeit his meager profits from that scheme which were about four thousand dollars and he understood that there would be restitution paid to open market investors even though he'd only traded in about forty thousand dollars worth of cube stock their market investors who had lost some greater amount which turned out to be about six hundred thousand dollars and he would be responsible for that number but he did not expect and what he did not agree to was that two years later the government would seek to hold him responsible for number four times that amount based on he doesn't have to agree to well he has to agree to pay restitution for the offense that he's pleading guilty circumscribed the feds as the public market offense read is losses to those public market investors so this is the off chance of conviction that your that is the life and action and that is my st point and i can address that and then move on to what is assuming that the court finds that the offense was more broadly stated whether he in fact reasonably foresaw the losses that were caused to the private place in investors and under what  raise the value and crane aura of being an active market setting a certain price and so on why weren't they equally victims of his conduct that was a as the finally separate scheme there are i suppose when someone manipulates the price of stock any number of ways that someone can then take that stock and cause all sorts of other types of harm for example in the paul case which the government relies upon the defendant their pledge securities to a ba securities that had been fortunately inflated and of course that causes the bank ultimately to lose money and there was a court looked at was the fact that that was the banks have been specifically mentioned in the indictment and that the defendant in his expressly recognized that he had pledged those securities and that they had caused those losses here what the conspirators did was participate in this open market fraud which caused the stock to go up and  think we have an extremely strong argument that the court relied on two inferences from the transcript which i think even the government has to concede are wrong but let me start with the legal point which is this court and  others and judge clement in the th circuit talked about in a plea agreement situation the need to respect what the parties have reached an agreement and the reasonable expectations of the defendant and that goes to how are they defining the offense not withstanding the breadth of the indictment here in fact the indictment which is thirty pages describes in detail and open market fraud it never once mentions the word private placement now derren agrees to plead guilty to that and they have a plea agreement and they negotiated and it says you will plead guilty to count one and count one that count that doesn't mention a private placement they say we will calculated differently now then they go to the allocution the allocution at the plea is completely based on the open market scheme there is no mention of a private placement by darn good the government will ask what it would prove does not mention a private placement does not give the defendant any notice that it's some point he's going to be held responsible for that to the contrary it reiterate the point that the guidelines the losses the victims are being identified open market victims then we have p s r and three again not once does the p s r mention a private placement much less give the court a factual basis to determine how to calculate losses from that it's only two years later after the plea after the trial where the government on the eve of sentencing comes up and says there's a private placement here so in terms of the legal question we do take a lot out of judge clement's decision i don't think it's necessary but it does provide a framework for analysis that other circuits and district courts have used to to respect the rights of the expectations apart and so that the government argues that the losses in the private placement part of this case are attributable to what went on in the open market fraud isn't that correct they think they're not unrelated they do think  they are well i don't know if that's true at the time of the plea because there was no mention of it there certainly now after much time had passed they said well we think that these are related if they were so related one of my the thought they would mention it in the indictment question the i'd like to address the factual aspect of it quickly if i may take a minute take a minute i'm watching the clock and the judge made the determination that there is goodrich knew about the private placement based on two fact trying to compensate goodrich other than his commissions by giving him cheap stock but he day weren't doing so through private placement stuff it's abundantly obvious as the government says in its brief that they were trying to give him discounted escrow shares at a quarter he's not by dollar private placement shares which are being sold to victims and are going to be locked up for a year that's what a coconspirator here is trying to get he's trying to get the guilty to conspiring to commit securities fraud he participated in a scheme to artificially manipulate the price of cube stock between april two thousand and fourteen and july two thousand and fourteen he helped alter the next level information so placement stock is cube stock in the open market as stock is keep stock it's all the same stock of what isn't reasonable to adopt the role that the th circuit and at least one other seem to have adopted that we need to in the context of the plea the district court now relies on in its restitution ordered seems to me unfair to do that and it seems to me that the th circuit rule is a reasonable one to look at the intent of the parties at the time the plea agreement was entered into accidents and he denied being involved you might distinguish adam's in a particular way but i'm not i'm asking what's one with a rule that says in looking at what the afghans of conviction is especially in the conspiracy context we should not guy is a nice guy a bad guy whether he could have foreseen that because of what he was doing other people might jump in and do other schemes the question is what did were able to get control of the stock manipulate the stock and persuade investors to invest in the stock ha this gallant to claim to be a merchant bank in the indictment we described what his company on the view was his company would come to these private companies and persuade them basically to let him have control over have their top focus on this defendant what this defendant thought he was agreeing to adapt time and what not facts what the scope of his act comprehended absolutely but  to make me just like do not work without raising money for the company and the way they raise money for the company is treated as private placement that can happen in different ways again i'm not hearing an answer which my question why  isn't reasonable to look at the understanding of the parties at the time the plea agreement was entered into their reason we should not do that because i don't think there was an understanding that the sentence his offensive committed as a sense of connection was only limited she's informing the public that the stock was worth something when it was that answer you had opposing can't you heard his opening remarks saying this wasn't in the indictment it wasn't in the well he wants to focus on the pump and dump because in the open market trends because that is how the stock was manipulated the stock was manipulated through these matched and coronated trades which is which is client participated in the government's argument is because it was the same stock in the pump and dump and in the private placement that that was enough notice of this defendant that he would carry the damages big disagreement between the government and the defendant about about the facts of this case and that about that instance there is a copy of the transcript of the call in the appendix that you're going to provide and when you look at the discussion between good about what kylie kane is doing based on what was in the background facts and you know gentry tell ya know does sit through a five week trial about this case so he had a very good understanding of this there were hiring kane was doing a variety of things one of the things she was doing was she was in charge of private placement and she was she was coordinating the sale of the stock at one dollar a share for the company she prepared a private placement memorandum she had the paperwork that she would send out she also acting as a screw agent with respect to the proper public trained yes that's a different type a different category of stop and let me say that that as so when when we talk about kind of what kind we can have for a buck and the documentation she had the only thing that kyron came in selling at a buck is the private placement shares the only documentation she's prepared about the sheriff as a private placement shares a disc out and his crew of people on the side they are taking distribute those free trading shares amongst ourselves and he's selling them for a dollar share of the skall has his own separate set of additional victims which we had originally included in our st restitution letter below the district court but then we carved out by the by with a final hearing because we said well maybe that was not reasonably foreseeable to deron goodreads at this gala and his crew you know were selling those escrow shares which they're going to fully understood as acquiring came controlled and that was how they were manipulating the price and he wanted to control some client demand so close we don't lock the price up from five to seven but he may not have understood that on the side discount was taking those escrow shares that he didn't own he didn't control were not his name that k agreements in conspiracy cases they tend to be taken seriously tend to be not boundless very ill defined at the contours and that makes it harder especially for a defendant to understand what he's going to be ultimately responsible for after being detailed detailed allocution on sentencing but restitution tends to be a little more difficult to predict and so here i think that applies on all fours because  we actually don't even speak about this other separate scheme and i think that judge poorer i'm sorry just carney was right to ask about the adams case and what sort of guidance that can give us because the theme of adams and colorado which we cited and there are some others from other circuits which whether they use the terms mutual understanding or not come from the same place and that is one of the reason the court some idea of when it's an appropriate opportunity to write on an issue and i think this case respectfully opportunity to adopt that test is preserved the factors are very  to to structure this as a debate between what's more important incarceration or restitution having represented many criminal defendants over my life i can say unfortunately some have valued one over the other and they don't all necessarily agree but it's just as important during the allocution and during the proceedings for the defendant to understand the consequences and also to respect the fact that there's been a negotiation right there's been documents provided to the defendant there's been an indictment there's been negotiations there's been a plea agreement there's been plea proceeding all of that informs the defendant of what are the reasonable expectations of this solemn moment where he pleads guilty and takes responsibility for an offense a government counsel m nothing to do with goodrich was to sell stocks to private investors and doesn't the government say though that the private scheme is essential to support the putting public market up and up not sure it works both ways i'm not sure it matters but certainly pumping up the took money but like and kept the company going for the relevant period they overlapped in time if you know overlapping time but again the point is that they are still schemes can overlap schemes can relate to each other or assist each other but as the parties proceeded in this case they define those schemes well they only really defined one scheme which was this public market scheme and they talked about even during the allocution the purpose of this was to defraud the public market involved in the entire scheme i suppose and one could say that if someone pledged to a bank in the bank lost one hundred million dollars making a loan that would be part of the same scheme too there are boundaries to this and the parties decide that we are trying to discern what the boundaries are and you make it a question of notice was he on notice that he might be liable for all the damages from the entire scheme and the government says it was always on notice this was one scheme well i don't think it's just notice it's also about a reason left by cation is certainly something this court has emphasised but it's also what the agreement is and how they have defined it one could say and adams who was on notice that there were other parts of this other at car accident but they defined it say ok you're you're you're doing it for the response of these two here it's a little difficult because what seems clear is that the government despite all the evidence it had didn't seem to know about the product placement scheme that they are now saying was recently pushed forseeable to deron goodrich where the government had thousands of hours of tapes documents cooperators and it appears that they don't think about this or understand this in till two years after daryn's plea when all this and they say there's a private placement scheme here if it was so integral they would have put it in the indictment they put the escrow account they put the shares in the indictment they put the public market shares in the indictment but they