United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SECURITIES & EXCHANGE

COMMISSION,

Plaintiff,

v.

MICHAEL C. PATTISON,

Defendant.

___________________________________/

No. C-08-4238 EMC

FINAL PRETRIAL CONFERENCE

ORDER

A Final Pretrial Conference was held in this matter on August 11, 2010. Pursuant to Federal

Rule of Civil Procedure 16(e), this order memorializes the Court’s rulings and/or the parties’

stipulations.

I. TRIAL DATE & LENGTH OF TRIAL

A. The trial shall begin on September 7, 2010, in Courtroom D, 15th Floor. There shall

be a total of fourteen court days. The first day of trial, i.e., September 7, 2010, shall be held from

8:00 a.m. to 5:00 p.m. The subsequent trial days shall be held from 8:30 a.m. to 2:00 p.m., although

court may hold in session beyond 2:00 p.m. if necessary. There will be one 15-minute break in the

morning and a 45-minute lunch break.

B. Each party shall have twenty-four hours to present its or his case. This includes all

examination, including direct and cross. This does not include jury selection, jury instructions,

opening statements, or closing arguments. The Court may impose separate time limits for opening

statements and closing arguments.

Case 3:08-cv-04238-EMC Document 255 Filed 08/17/10 Page 1 of 14
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

II. PROCEDURE FOR EXHIBITS AT/DURING TRIAL

A. No later than the end of each trial day, counsel shall inform opposing counsel of

which exhibits, if any, he or she intends to introduce during the next trial day and, if necessary, with

respect to which sponsoring witness. If any such exhibits are still objected to, both counsel shall

notify the Court after the jury is excused for the day and shall identify the exhibits at issue and the

objections. The Court may schedule a conference that afternoon or the following morning to resolve

the disputes.

B. With respect to exhibits to be used on the first day of trial, counsel shall inform

opposing counsel of which exhibits, if any, he or she intends to introduce by September 2, 2010, at

9:00 a.m. If any such exhibits are still objected to, both counsel shall notify the Court by 9:00 a.m.,

September 3, 2010, and shall identify the exhibits at issue and the objections. Counsel should notify

the Court via e-filing and via fax at (415) 522-4200. The Court may address the dispute on the first

day of trial before any testimony begins.

C. If a party intends to use a projector or other equipment to show an exhibit (or

demonstrative) to the jury, that equipment shall be set up and ready for use by 8:30 a.m. each day

(8:00 a.m. for the first day of trial). The parties should immediately file with the Court, if necessary,

administrative requests to bring projectors and/or other equipment to the courthouse for use at trial. 

III. PROCEDURE FOR WITNESSES AT/DURING TRIAL

A. Each party shall be prepared, during its case in chief or any rebuttal, to present its

next witness. At any time, if the party whose case is being presented is not prepared to present its

next witness, that party may be deemed to have rested that portion of its case. No further witnesses

shall be permitted by the party who has so rested in that portion of the case (e.g., case in chief or

rebuttal) unless otherwise ordered by the Court. Alternatively, the Court may charge time for the

remainder of the court day to the party failing to have its next witness available.

B. Counsel are expected to cooperate with each other in the scheduling and production

of witnesses, including informing one another of witness order. Counsel should give opposing

counsel reasonable notice (at least one day) with respect to which witnesses will be testifying on a

Case 3:08-cv-04238-EMC Document 255 Filed 08/17/10 Page 2 of 14
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

particular day. Witnesses may be taken out of order if necessary. Every effort shall be made to

avoid calling a witness twice (as an adverse witness and later as a party’s witness). 

C. Only one lawyer for each party may examine any single witness.

D. If a witness is testifying at the time of a recess or adjournment and has not been

excused, the witness shall be seated back on the stand when the court reconvenes. If a new witness

is to be called immediately following recess or adjournment, the witness should be seated in the

front row, ready to be sworn in.

E. Counsel shall refrain from eliciting testimony regarding any undisputed facts as set

forth in any stipulation filed with the Court. The Court may read to the jury such undisputed facts at

appropriate points in the trial.

F. Immediately before each new witness takes the stand, counsel calling the witness

shall place on the witness stand a clearly marked copy of each exhibit that counsel expects to have

the witness refer to during his or her direct examination. Immediately before beginning crossexamination, counsel conducting cross-examination shall do the same with any additional exhibits to

be referenced on cross.

G. If counsel intends to have the witness draw diagrams or put markings on visual

exhibits or diagrams prepared by the party calling the witness, the witness should do so before

taking the stand. Once on the stand, the witness may adopt the diagrams and/or markings and

explain what they represent. If the diagram or visual exhibit is prepared by the opposing party, the

witness shall not make any markings on the diagram or visual exhibit without leave of the Court.

H. Witnesses (other than the party or a representative thereof) shall be excluded from the

courtroom prior to completing their testimony.

IV. OTHER PROCEDURES AT/DURING TRIAL

A. To make an objection, counsel shall rise, say “objection,” and briefly state the legal

ground (e.g., hearsay or irrelevant). There shall be no speaking objections or argument from either

counsel unless requested by the Court. Only one counsel may make objections for each witness.

B. Bench conferences, or the equivalent of sidebars, will not be permitted absent truly

extenuating circumstances. Disputes regarding exhibits shall be resolved as set forth in Part II,

Case 3:08-cv-04238-EMC Document 255 Filed 08/17/10 Page 3 of 14
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

supra. Any other disputes or problems should be addressed either before the trial day commences,

at the end of the trial day, or during a recess, if necessary. If bench conferences become excessive,

the Court will charge time spent thereon against either or both parties’ time.

V. WITNESSES

A. Final Witness Lists

The parties submitted their final witness lists on August 13, 2010. See Docket Nos. 248,

251.

B. Disputes re Witnesses

1. Custodian of Records

The parties have reached a stipulation such that there is no need for the custodians of records

identified by the SEC to testify.

2. Auditor Witnesses Generally

The Court has already made a ruling regarding the proper scope of auditor testimony -- i.e.,

lay versus expert testimony. See Docket No. 209 (Order at 6-9). On August 9, 2010, two days

before the final pretrial conference, Mr. Pattison submitted a brief, without asking leave of the

Court, regarding the issue of lay versus expert testimony. Mr. Pattison in effect asked for

reconsideration of the Court’s prior ruling. The Court hereby denies the motion to reconsider. 

Under the Civil Local Rules, Mr. Pattison was required to seek leave to file a motion to

reconsider. See Civ. L.R. 7-9(a) (providing that “[n]o party may notice a motion for reconsideration

without first obtaining leave of Court to file the motion”). He did not do so. Moreover, under the

Civil Local Rules, Mr. Pattison was required to make a specific showing as to why he should be

given leave to file a motion to reconsider. See Civ. L.R. 7-9(b). Again, Mr. Pattison failed to do so. 

For example, Mr. Pattison failed to show “[a] manifest failure by the Court to consider material facts

or dispositive legal arguments which were presented to the Court before [its] interlocutory order.” 

Civ. L.R. 7-9(b)(3). Therefore, Mr. Pattison’s motion to reconsider is denied.

Moreover, on the merits, the Court sees no basis for reconsideration. The Court has

reviewed the cases cited by Mr. Pattison in his brief. None of the cases affects how the Court has

viewed and currently views the issue of lay versus expert testimony. 

Case 3:08-cv-04238-EMC Document 255 Filed 08/17/10 Page 4 of 14
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

For example, Bank of China v. NBM LLC, 359 F.3d 171 (2d Cir. 2004), is one of the cases

that the Court mentioned at the hearing and then cited in its order on the motion in limine. Mr.

Pattison’s contention that the Court misconstrued Bank of China is incorrect. Bank of China is

consistent with the Court’s approach as the Second Circuit held that, 

to the extent Huang's testimony was grounded in the investigation he

undertook in his role as a Bank of China employee, it was admissible

pursuant to Rule 701 of the Federal Rules of Evidence because it was

based on his perceptions. 

However, to the extent Huang's testimony was not a product of

his investigation, but rather reflected specialized knowledge he has

because of his extensive experience in international banking, its

admission pursuant to Rule 701 was error. Thus, Huang's explanations

regarding typical international banking transactions or definitions of

banking terms, and any conclusions that he made that were not a result

of his investigation, were improperly admitted.

Id. at 181-82. 

As another example, JGR, Inc. v. Thomasville Furniture Indus., Inc., 370 F.3d 519 (6th Cir.

2004), is not on point because the Sixth Circuit’s analysis was driven by the advisory committee

notes for Federal Rule of Evidence 701 which state that “‘the owner or officer of a business [may]

testify to the value or projected profits of the business, without the necessity of qualifying the

witness as an accountant, appraiser, or similar expert.’” Id. at 524.

And as a further example, in United States v. Cruise, 363 F.3d 187 (2d Cir. 2004), the

government did not dispute that the witness’s testimony regarding the meaning of a phrase was

expert in nature. See id. at 193-94. The government instead tried to “minimize the scope of that

testimony.” Id. at 194. Moreover, the Second Circuit was most troubled by the fact that witness was

straying in his testimony from the scope of his expertise. See id. at 195-96.

The Court therefore denies the motion to reconsider both on procedural as well as substantive

grounds. To the extent, however, Mr. Pattison’s brief raises issues where additional guidance from

the Court may be helpful, the Court notes as follows.

An auditor may, as a general matter, testify about his or her percipient role in the underlying

events. Thus, as the Court previously held: “[T]he auditors [may] testify about their role auditing

Embarcadero’s financials and their personal interactions with [Mr. Pattison].” Docket No. 209

Case 3:08-cv-04238-EMC Document 255 Filed 08/17/10 Page 5 of 14
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6

(Order at 9). If an auditor also testifies about, e.g., why he or she reached a particular conclusion,

that testimony shall not be barred so long as it is directly tied to the auditor’s percipient role in the

underlying events, even if it involves some degree of experience and specialized knowledge. Where

the auditor strays from his or her percipient role and discusses, e.g., the accounting rules more

generally, that testimony shall not be permitted. 

The Court so rules in part because the line between expert and lay testimony is unclear and

has been subjected to varying interpretations by the courts. In addition, the Court so rules because

the sanction for nondisclosure of experts lies in Federal Rule of Civil Procedure 37(c)(1), which

states that a failure to identify an expert witness within the time frame provided by Rule 26(a)(2)(c)

need not give rise to any sanction where the failure is harmless. Notably, Mr. Pattison appears to

have deposed the bulk of the witnesses at issue, and thus, even if the witnesses offered expert-like

testimony, Mr. Pattison had a fair opportunity to cross-examine on those matters. Furthermore,

descriptions of these witnesses’ expected trial testimonies were exchanged months ago. 

Accordingly, where the witnesses such as the auditors have already been deposed, the Court shall, as

a general matter, be more lenient with respect to the scope of testimony permitted as stated above. 

However, because Mr. Wallace was not deposed, the Court will impose strict limits on his

testimony.

3. Daniel Wallace

The Court shall permit Mr. Wallace to testify even though he was not previously deposed. 

Mr. Wallace’s investigative testimony has been available to Mr. Pattison. Moreover, Mr. Pattison

could have subpoenaed Mr. Wallace, as an individual, to appear for a deposition but apparently

chose not to do so. But, as discussed above, because Mr. Wallace was not previously deposed, the

Court shall draw a stricter line as to what constitutes lay testimony.

4. Karen Shum

To the extent Mr. Pattison seeks to have Ms. Shum testify about her or PwC’s knowledge of

option pricing issues for technology companies in Silicon Valley, the Court has already indicated

that, at most, the testimony is conditionally relevant. See Docket No. 209 (Order at 6) (stating that

Mr. Pattison would have to show, inter alia, that the auditor communicated to him the fact that other

Case 3:08-cv-04238-EMC Document 255 Filed 08/17/10 Page 6 of 14
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1 Because the SEC has alleged aiding and abetting claims, another issue is whether the auditor

communicated the same to persons whom Mr. Pattison aided and abetted -- i.e., Mr. Wong or Mr.

Sabhlok. Mr. Wong and Mr. Sabhlok are the two individuals whom the SEC has indicated were the

principals of Embarcadero centrally involved in the alleged violations.

7

companies were doing the same thing).1 She cannot testify to establish the bare fact of such

practices.

5. Stephen Ferruolo

To the extent Mr. Pattison has objected that Mr. Ferruolo’s testimony is expert and not lay in

nature, the Court’s ruling with respect to the admissibility of auditor testimony provides the

necessary guidance.

As for the SEC’s objection regarding testimony by Mr. Ferruolo that he knew other law firms

in Silicon Valley were advising clients that retrospective pricing of stock options was acceptable, the

testimony (similar to above) is at most conditionally relevant. In particular, Mr. Pattison would have

to show that Mr. Ferruolo communicated this information to him or to Mr. Wong or Mr. Sabhlok

during the relevant time period.

6. Gary Haroian

Mr. Haroian shall provide live testimony. Mr. Pattison has failed to explain why his live (as

opposed to deposition) testimony would be prejudicial, particularly when Mr. Pattison had the

opportunity to depose and did actually depose him.

As explained at the pretrial conference, since the Restatement containing a description of the

Special Committee investigation and its findings is admissible, Mr. Haroian shall be permitted to

provide testimony about the Special Committee investigation, except as to specific matters which

have been redacted from the Restatement. Mr. Pattison may cross-examine Mr. Haroian to, e.g.,

expose any bias in the way that the investigation was conducted or to challenge the accuracy of the

investigation. 

7. Michael Roberts

Mr. Roberts shall provide live testimony in lieu of deposition testimony if either party is to

call him as a witness.

///

Case 3:08-cv-04238-EMC Document 255 Filed 08/17/10 Page 7 of 14
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

8

8. Michael Shahbazian

Mr. Shahbazian shall be permitted to testify about Embarcadero’s internal review of its stock

option granting process that began in mid-2006. Any testimony, however, about systems that he

implemented shall not be allowed.

9. Dennis Wong

The Court shall not permit Mr. Pattison to solicit testimony from Mr. Wong, as part of his

case-in-chief, about the materiality of Embarcadero’s failure to record a compensation expense for

the relevant stock options. The Court, however, reserves ruling as to whether Mr. Wong may testify

as part of Mr. Pattison’s rebuttal case.

C. Deposition Testimony

The only witnesses whose testimony shall be provided via deposition are Frank Polestra and

Stephen Wong. The Court shall issue its specific rulings on the parties’ deposition designations at a

later date.

VI. WRITTEN DISCOVERY RESPONSES & EXHIBITS

A. Written Discovery Responses

In his pretrial filings, Mr. Pattison states that he intends to present as evidence some of the

SEC’s responses to written discovery, namely: (1) responses to Rogs Nos. 9-18 (renumbered by the

SEC Rogs Nos. 14-23); and (2) responses to RFAs Nos. 32-38.

The Court agrees with the SEC that the interrogatory responses should not be presented as

evidence to the jury. Most of the interrogatories are about damages or penalties, which is a

calculation for the Court, not the jury. In one interrogatory (No. 17/22), Mr. Pattison asked the SEC

to identify persons who knew about the backdating but the SEC never provided a substantive

response. In another interrogatory (No. 18/23), the SEC was asked to state all facts to support its

response to RFA No. 38. RFA No. 38 asked the SEC to admit that a particular document was not

backdated. The SEC denied the RFA. In its response to the above interrogatory, the SEC stated that

facts indicating that the document was backdated included, inter alia, Mr. Pattison’s admission that

it was his practice to backdate. The Court excludes this interrogatory response because it has

marginal probative value as evidence and will likely confuse the jury should it be admitted. The

Case 3:08-cv-04238-EMC Document 255 Filed 08/17/10 Page 8 of 14
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

9

interrogatory is basically a contention interrogatory, which was helpful for Mr. Pattison to figure out

what his legal strategy should be, but would not be very informative for the jury.

The Court also agrees with the SEC that the responses to the RFAs should not be presented

as evidence to the jury. In response to RFAs Nos. 32-38, the SEC made outright denials – with one

exception where it said that it had insufficient information to admit or deny (RFA No. 33). Given

the denials, there is little value in having this putative evidence go to the jury.

B. Exhibits

1. Stipulation re Authenticity

The parties have entered into a stipulation regarding the authenticity of certain exhibits. See

Docket Nos. 239-40 (stipulation and order).

2. General Guidance

a. Documents Related to State of Mind of Key Players

Evidence related to the state of mind of Mr. Pattison is clearly relevant. Moreover, because

of the aiding and abetting claims, evidence related to the state of mind of Mr. Wong and Mr.

Sabhlok is also relevant. As noted above, the SEC clarified at the pretrial conference that these two

individuals were the major players at Embarcadero whom Mr. Pattison is alleged to have aided and

abetted.

Thus, a relevant question is what the state of mind of these key players was during the time

of the alleged “conspiracy.” According to the SEC, the backdating practice at issue was in place

from approximately 2000 to 2004. Therefore, communications involving these key players during

this time frame will likely be admissible. Evidence post-dating this time period may still be

admissible if it goes to the state of mind of the key players during that time period. In other words,

after-the-fact conduct can be probative of their earlier state of mind.

Where evidence is being offered not for the truth of the matter asserted but rather for the

effect on the listener and the listener is one of these key players, the evidence will in all likelihood

not be hearsay. The parties should meet and confer to determine whether they can reach an

agreement on a limiting instruction that explains to the jury how the evidence is being offered. Such

an instruction shall be submitted by August 19, 2010.

Case 3:08-cv-04238-EMC Document 255 Filed 08/17/10 Page 9 of 14
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

10

b. Documents Related to Widespread Knowledge of Backdating Practices

Because one of the SEC’s factual theories is that Mr. Wong, Mr. Sabhlok, and Mr. Pattison

were engaged in a secret scheme to defraud (secret from the Board and auditors), it is fair for Mr.

Pattison to offer evidence that the backdating of stock options was not a secret and was in fact

notorious to many persons at Embarcadero. Of course, simply because a person had knowledge that

stock options were backdated does not necessarily mean that the person knew that no compensation

expense was recorded with respect to those stock options – or that a compensation expense

(arguably) needed to be recorded. But it may go to Mr. Pattison’s state of mind and may rebut an

aspect of the SEC’s theory of the case.

To the extent the SEC has lodged a hearsay objection to evidence concerning other persons’

knowledge of the backdating, Mr. Pattison may be able to lay a foundation establishing the

applicability of the business records exception. Moreover, if the evidence is not necessarily being

offered to prove the truth of the matter asserted (i.e., that there was backdating) but rather to show

the state of mind/awareness of one or more parties to the communication, it is not hearsay.

c. Jiang-Related Documents

The Court shall allow evidence related to Ms. Jiang for certain purposes – e.g., to show that

she was one of many people at Embarcadero who knew that there was backdating and that therefore

there was no secret scheme to defraud. Also, if the communication reveals the state of mind of Mr.

Pattison, Mr. Wong, or Mr. Sabhlok, it is admissible.

However, the Court shall not allow evidence related to Ms. Jiang for other purposes – e.g., to

show that a CPA (Ms. Jiang) believed that the backdating practice was permissible and that therefore

Mr. Pattison’s actions were reasonable. Whether Ms. Jiang made any conclusions about the legality

of backdating, and the basis of any such opinion is speculative. Moreover, allowing evidence for

this purpose would effectively make Ms. Jiang an expert, for which she has not been qualified or

disclosed.

d. Grant Approval Summaries

The grant approval summaries may qualify as business records for purposes of the exception

to the hearsay rule if a proper foundation is laid. Whether the date attested by Mr. Wong is accurate

Case 3:08-cv-04238-EMC Document 255 Filed 08/17/10 Page 10 of 14
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

11

(and thus whether records are reliable in that regard) is a question for the jury. However, the Court

agrees with the SEC that Mr. Pattison may not have any witness testify about the summaries. 

Anyone with personal knowledge of the summaries may provide percipient testimony about the

summaries – e.g., the preparer of the summaries, Mr. Wong who signed the summaries, and the

auditors and/or Mr. Pattison if the summaries were exchanged between them. But it is not proper for

Mr. Pattison to show the summaries to, e.g., a member of Embarcadero’s board and simply ask their

opinion whether the document on its face discloses backdating. 

3. Specific Rulings

Attached hereto are (1) the Court’s rulings regarding which parts of the Restatement (10-K)

shall be redacted (redactions noted in right margin) and (2) the Court’s rulings regarding the parties’

objections on which they requested advance rulings. 

With respect to (1), the Court stands by its ruling that the Restatement as a 10-K is a business

record for purposes of the exception to the hearsay rule. The Court acknowledges the authority cited

by Mr. Pattison, see Paddack v. Dave Christiensen, Inc., 745 F.2d 1254 (9th Cir. 1984); United

States v. Reyes, 239 F.R.D. 591 (N.D. Cal. 2006), but notes that these cases are distinguishable

because they did not involve a 10-K as here. As the court in In re WorldCom, Inc. Securities

Litigation, No. 02 Civ. 3288 (DLC), 2005 U.S. Dist. LEXIS 2215 (S.D.N.Y. 2005), reasoned, a 10-

K has an indicia of reliability. And as the Court previously noted, the indicia of reliability is

supported by the fact that Mr. Pattison has failed to articulate any plausible reason why Embarcadero

would have an interest in or incentive to issue a Restatement if not required, disclose backdating and

failure to account therefor if not true, or overstate the magnitude of the underreporting. In effect, the

Restatement has the same indicia of reliability as a statement against interest. Cf. Fed. R. of Evid.

804(b)(3). Furthermore, nothing in those portions of the Restatement which the Court will allow

into evidence expressly assigns blame or wrongdoing by any individual including Mr. Pattison. The

Court has decided to redact certain portions of the Restatement not based on hearsay grounds but

rather based on Federal Rule of Evidence 403.

With respect to (2), the Court notes that its rulings herein do not bar a party from raising (or

re-raising) a foundation or authenticity challenge, unless authenticity has previously been stipulated

Case 3:08-cv-04238-EMC Document 255 Filed 08/17/10 Page 11 of 14
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

12

to. Furthermore, an objection that is sustained does not bar a party from asking that the evidence be

admitted if it comes up in a different context and is offered for a different purpose than previously

discussed.

VII. DEMONSTRATIVES

The parties shall meet and confer in advance (prior to the date of demonstration) and

exchange demonstratives to avoid objections. Any objections shall be brought to the Court’s

attention before 4:00 p.m. the day prior to being exhibited.

VIII. VOIR DIRE, JURY INSTRUCTIONS & VERDICT FORM

A. Voir Dire

The Court shall not use a jury questionnaire but shall voir dire the potential jurors (taking

into account the proposed voir dire submitted by the parties). The Court has already described in its

Case Management Conference order the list of standard questions it intends to ask. See Docket No.

202 (order). It will likely supplement those with the following questions or variations thereof:

1. This is a civil action brought by the Securities and Exchange Commission, sometimes

known as the “SEC,” against Michael C. Pattison for violations of federal securities laws. Does

anyone on the panel know, or have any of you or your close friends or relatives had any dealings

with Mr. Pattison or with any of his relatives?

2. The SEC’s case against Mr. Pattison involves his employment at Embarcadero

Technologies, Inc., a software company. Are any of you familiar with Embarcadero Technologies? 

If yes, how?

3. The lawyers representing Mr. Pattison in this case are Patrick Richard, Jim Vorhis,

Katy Young, and Brendan Macaulay of the law firm Nossaman LLP. Do any of you know any of

these attorneys? Have any of you had any dealings with this law firm?

4. Have any of you, a member of your family or a close friend ever had any dealings

with the Securities and Exchange Commission?

5. The lawyers representing the SEC in this case are Susan LaMarca, Robert Tashjian,

and Bill Salzmann. Do any of you know these attorneys?

Case 3:08-cv-04238-EMC Document 255 Filed 08/17/10 Page 12 of 14
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

13

6. Have any of you or any of your close friends or relatives ever been charged with any

crime involving the regulation of securities or financial disclosure laws?

7. Have you or any of your close friends or relatives ever been a party to a lawsuit

involving a government agency that regulates securities or financial disclosures, including the

Securities and Exchange Commission?

8. Have you or any of your close friends or relatives ever been involved with any

investigation by the Securities and Exchange Commission or similar regulating agency?

9. Do you manage money or investments for anyone outside of your immediate family? 

If so, is there anything about your management of others’ money that would prevent you from

deciding this case fairly?

10. Have you or your close friends or relatives lost money because of fraud or financial

mismanagement by someone outside the family? If so, do you blame any government agency,

including the Securities and Exchange Commission, for the loss?

11. Have you or any of your close friends or relatives ever had a professional license in

the securities industry?

12. Do you know what a stock option is? Do you have any strong feelings about stock

options?

13. Have you ever been employed by a company that granted stock options?

14. Have you or any of your close friends or relatives ever been granted stock options as

an employee? If yes, please describe the circumstances.

15. Do you have any formal accounting experience? What was that experience? Have

you taken any accounting classes?

16. Have you ever heard, read, or seen anything about the “backdating” of stock options?

17. Do you have any reason why you could not be fair and impartial in deciding a case

where the Securities and Exchange Commission has sued a person for making false or misleading

statements to the public? If yes, why?

18. Do you have much financial investment experience in stocks? If so, how do you

make your investment decisions?

Case 3:08-cv-04238-EMC Document 255 Filed 08/17/10 Page 13 of 14
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

14

The Court shall also give each party an opportunity (25 minutes) to voir dire the potential jurors

after questioning by the Court.

B. Jury Instructions

The parties are to meet and confer to determine whether they can reach an agreement

regarding any preliminary instructions that should be read to the jury at the outset of the case (i.e.,

before the presentation of opening statements and evidence) regarding the main claims at issue. 

Such instructions shall be filed by August 19, 2010.

The Court notes that the SEC has filed a brief stating that it intends to dismiss the Section

17(a) claims, the Section 13(b)(2) claims, and the Section 14(a)/Rule 14a-9 claim. Mr. Pattison has

filed a statement of nonopposition.

C. Verdict Form

The Court defers ruling on a final verdict form until after the jury instructions are resolved. 

The Court notes that, at this juncture, it is inclined to use a general verdict form (per cause of

action).

IT IS SO ORDERED.

Dated: August 17, 2010

_________________________ EDWARD M. CHEN

United States Magistrate Judge

Case 3:08-cv-04238-EMC Document 255 Filed 08/17/10 Page 14 of 14