today your honour's i'm only going to focus mostly on the sixty five i know that the f c c feels that the cooperation agreement should kind of wag the dog here but if there was no wrongful denial of the sixty five there would be no cooperation agreement argue about and we believe that the district court made two principal legal errors on the sixty five and i want to start with the standard to review because it's very important sixty five we freely concede that the general standard is abuse of discretion however this court said into there were two legal errors around let me start with with the guilty plea in collateral stop and then i'll turn to you as we newman the first legal error was the district court's failure to recognize that the guilty plea and the district court's own statements to mr conrad app were largely met on his motion asked about any of that whatever your complaint was about that it doesn't it doesn't come it didn't compel your client to enter into the agreement when you fall the time adventure on or it did that the cooperation agreement was  do it there's always a chance that things could change in any event he entered into it or out of his own free will the language of the law in the middle of this is from the four circuit you're on would not have been penalize particularly for not entering into that agreement he would not even penalize that's correct on but judge rakoff told him he had no defense in the case so it's unclear what mr connor would have done in that circumstance his attorney is going to show up every day to be told that he has no defense and that's if even if you're looking at it from a non legal perspective can't deny that he could have done that but he had no defense he was told by the district court he had no defense and there isn't a fact like that in any other sixty five case if you look at us we're back in new york which both parties agree is the leading things stand now ware's me he was and so he had a relationship with war with martin or trust and confidence he would talk to him about what was going on as part of you know their friendship and their relationship and so  falls apart but there's a more important part you made on that your honor and that there was evidence introduced the truck accident was what that that was told martin yes yes at a lunch meeting basically saying i'm stressed that i'm working on this deal and he didn't intend to give it to martin and that's the key but but also your honor and some evidence was not admitted to trial but some was there was evidence that dallas and morton had an ongoing relationship where dallas would give more information and at least  may text messages came in purpose of trading or just for the purpose of furthering their own personal relationship as friends martin testified in his deposition and it middle of this was not all admitted at trial but at his deposition he testified that he believed truly that dallas was giving the information to trade on and at least one text message came in about this deal where martin told dallas that he was going to trade on the s p s inc stock he actually said i'm going to hit that stock i reckon extraordinary fact at his plea allocution mr conrad says yes i plead to the elements of insider trading but i didn't know the nature of the relationship between dallas and martin and i didn't know the nature of the benefit exchanged he said that before newman ever came out he said that before there ever was a newman i mean that's a remarkable thing to say two years ahead of time exactly what newman would hold and that's also going to be one of our defenses your honor which is that mr connor didn't have the sufficient knowledge of the dallas martin relationship in order to be liable for insider consideration on how much he was going to be liable for as long as he called now it was in his interest to secure that benefit and the government would have been down if he had cooperated but he breached his part three years st us that it was legal error for the district court not to realize that if the guilty plea was vacated the civil case had to be reopened is that right yes or on a map or somewhere is there any legal support for that what you're on of the issue is that the district or didn't recognize collateral estoppel role with the district or said what is what was the decision that was reached that now clue when you look at the opinion he says that mr conrad chose not to contest the f c c charges on the basis of the arguments that were later adopted newman that's that's untrue your honor because mr conrad tried to contest them and forbidden him from contesting any elements of insider trading your honour's point about being able to participate is true being able to defend himself is an entirely different matter there is no viable argument that he could defend himself from a guilty plea in the language of the supreme court as a guilty plea conclusive it's like a verdict there's nothing left to be litigated and if you look at the colloquy between argument would have been that that allocution was not enough to support the finding in the civil case is that the argument no it couldn't even been based oregon but if you're on that's that's ignoring the timeline it couldn't have occurred that the timeline doesn't work on your honor's question at that time that the allocution was sufficient when newman finally came out which was nearly two years later the newman actually said pleading to a breach of trust and confidence having knowledge of that the trial run was a trial in relation to the trial the other two in relation to the numinous decision the trial the other two was approximately a year and two months after newman came down and why trial that's a very important point your honor this was all part of the same proceeding mr conrad did not come along two years later after the law changed he made it almost immediately after judge carter in the criminal case vacated the guilty plea mr conrad made the motion in july of twenty it please the court david for the securities and exchange commission i'll focus also on based on but if the court has questions about the cooperation agreement the lack of reducing the civil penalty or the civil penalty itself happy to entertain those i think the fundamental problem with the sixty motion is that he conrad wants a civil judgment to be based on the collateral estoppel effect of his criminal plea but it's not his civil judgment was based on his consent and this court's decision and what first of all what conrad did was he did not press his argument he withdrew his motion and if he wanted to press his argument or any argument based on newman or any other argument in the case then you just press on and you reach a collateral stoppel decision furthermore the second point is let's see think about what would happen this is a motion to dismiss so the judge would if had been pursued that counsel said no i want to press because collateral stop was important i don't know i might need it later because that might be essential to sixty b or for my client or for whatever purpose there's a motion to dismiss this denied there's still no judgment based on collateral  stoppel at that point there would then have to be a summary judgment motion now maybe the commission brings a summary judgment motion based on collateral stoppel commission in those circumstances usually its practice is to bring in other evidence undisputed evidence so that there's two bases there is collateral stoppel as well as marshalling of the evidence now that may also have happened we don't know because there's no collateral a stop all judgment order and the last thing to point out is that it's essentially impossible that it could have been soley based a judgment could have achieved soley based on the civil claim on the collateral stoppel effect of the criminal case because conrad did not plead guilty to his unlawful trading on june twenty sixth two thousand and nine he did consent eventually to the civil judgment and relief for those trades those are his first trades and he's very very clear in his allocution he does not want to allocute to those first trades even if as they point out in the reply those were was an overt act as part of the conspiracy conrad was was it was he was adamant for whatever reason to not include those first trades he allocute to july twenty third trade two thousand and nine july twenty seventh two thousand and nine but not that trade so you have a judgment here in a civil case  relief for these trades and the government those as you see in the civil case would have necessarily put on evidence to establish that or at least there would have been a fight but whatever you would think about what the fight would be or what the collateral estoppel judgment might be that's not what happened here you have a consent judge you have a consent agreement and you have a judgment based on that consent agreement so that irrespective of what happens or what choices they think that they did not have to make that they did in fact have a choice to make there could have on the inconsistency between his testimony and his earlier statements and one of the things that he presses in his brief is that he wasn't prepared by the f c c to go on the stand to put him on the stand and prepare he says he was prepared to meet with you for drop preparation you know the preparation consisted of the f c c giving him a copy of his deposition asked him to review it without meeting with him and preparing him for trial and not where you are you're telling us i'm not sure that witnesses need to be prepared to tell the truth i don't think they need to be prepared to be consistent with their prior testimony i mean he made the misstatements judge raycroft made his findings but if you think you shouldn't prepare a witness before you put him on the stand that would be a curious trial strategy i just i just think he reviewed the deposition and he had counsel but that's that's that's the extent of it all right thank you mr  thank you our so let me start with the lack of bargaining power that mr conrad had when you know the settlement yes it's true he consented he put his signature on the settlement but when you look at what happened we don't know anything about the negotiations that took place or whether the any if there were negotiations the as he could have put them in the appendix we would have known if mr i have presumably now so i don't know what you want us to infer not infer here so what's the argument now the argument is that he didn't have equal bargaining power to the parties that lost in bank of new york or u s b schwarz which is the case cited with the bank of new york he didn't you don't have to have that equal bargaining power your honor but you have to have some we don't this looks like a form agreement by the f c c we will proceed no further than the limited penalty if if you cooperate but as the he puts out of his own brief the agreement did not like limit in any way judge rick of power to impose a penalty regardless of mr conrad cooperated so it was somewhat of an illusory promise so my point is your honor when you compare the bargaining power of the parties and bank of new york and schwartz mr conrad is far lower on the bar and even if your honor doesn't agree that we're at legal error the sequence of events that led to mr conrad settlement is unlike any other in others and the other sixty five case first of all we have p doesn't agree that these are purely legal errors we have a lot of basis for abuse of discretion based on what took place over the timeline of this case i just want to be clear when you say told me couldn't defend this case that's a shorthand for he told them that he couldn't couldn't make certain arguments in light of this guilty my answer your question yes i don't believe it's a mistake in the army to short him but it's not a mistake because if you look at what occurred in this case what would have inevitably happened is that each time with your current attorney below went to court to press his case mr judge rakoff would have brought up the guilty plea i think that's clear from the record yes we have to employ it but if you look at the record the transcripts and what occurred that's what would have happened mr connor could have showed up he could that's the last case and you will take it under advisement and we stand