### INTHE UNI TED S TATESCOU RT OFAPPEALS FORTHE FIFTH CIRCU IT

N o. 08- 20418
U
. S. CO M M O D I TYFU TU RE S T RA DI NG C OMM I S S I ON P l a i n ti ff-A p p ell a n t v. ANTHON Y DI Z ONA D efen da n t
- A pp el l ee

A p p ea lf

rom the U n i ted S tates D i stri ct C ou rt f or t h e Sou t h ern D i st ri ctof T exas
B ef ore R E AV L E Y , D AV IS, an d B E N AV ID E S , C i rcui tJu dg es. F O R T U N A T O P
. B E N AV ID E S , C i rcui tJu dg e: T h i s civilap p ea lstem s f rom a su i t alle g in gv i olati on s of t h e C om m od i ty E xc hange A c t , 7 U
. S
. C
. § § 1 e t s e q . (20 0 2 ). T h e U n i ted S tates C om m od i ty Fut ur e s Tr ad i ng Com m i s s i o n ( “ t he Com m i s s i o n” ) b r o ugh tt hi s s ui ta gai n st A nt hony D i zo na, a c om m odi t i es t r aderon t he W es tTradi n g D es k of C or al E n erg y R eso u rces , L
. P
. ( “C ora l”)
. T h e j u ryfou n d th a t D i zo n a h a d attem p ted to
m an i pu l ate t h e m arket pri ce of na t u ralgas i n i n t erst ate c om m erce i n vi ol ati on of 7 U
. S. C
. § 13( a) ( 2)
. Th e j ury, how eve r , r ej ec t ed t he al l egat i on t hat D i zo na had kno w i ngl y de l ive r e d fal s e r e po r t s t hat t e nde d t o af fe c t t he m ar ke t pri ce of nat ur alg as i n v i o l at i o n o f § 1 3( a) ( 2)
. Bot h pa r t i e s f i l e d a m o t i o n f

o rj udg m e nt United States Court of App eals

Fifth Circuit 

### F I L E D Janua ry 14, 2010 Cha rl es R. F ulb ru g e II I Clerk Case: 08-20418 Document: 00511004221 Page: 1 Date Filed: 01/14/2010N o. 08- 20418

2 as a m at t e ro f

l aw. The di s t r i c tc o ur tg r ant e d Di z o na’ s m o t i o n a nd d e ni e d t he Com m i s s i o n’ s m o t i o n. The Com m i s s i o n no w a ppe al s t he j udg m e nt , c o nt e ndi ng t h at t h e di st ri ctcourterr ed i n gran t i n g D i zona ’ s m ot i on f or j u d g m e n t as a
m att er of l aw an d as a resul t , t h e j u ry’ s verdi ct as t o t h e att em pted m an i pu l ati on cha rge shou l d be rei n st ated. T h e C om m i ssi on al so argues t h at t h e di st ri ctcourt
e r r e d i n de nyi ng t he Com m i s s i o n’ s m o t i o n f o rj udg m e nta s a m at t e ro f l aw and t h at i ti s enti t l ed to a n ew t ri alon the cha rge of kn ow i n g del ivery of fal se r e p o r ts
. F in d in gn o re v e r s ib le e r r o r , w e A F F IR M
. I
. FA CT UAL A ND PROCEDURAL HI S TORY T h e C o m m is s io n is a n in d e p e n d e n t fe d e r a l re g u la to r ya g e n c yth a t is
c har ge d wi t h e nf

o r c i ng t he pr o vi s i o ns o f t he Com m odi t y E xc hang e Ac t
. The C om m i ss i on f

i l ed a c om pl ai ntfori nj unct ive and ot herequi t abl e re l i ef i n fede r al di st ri ctcourt , al l egi n g t h at s i x i n di vi du al s— an an al ystan d f ive t rade rs em pl oye d by Sh el l Tradi ng G as and Pow er C om pany— had engage d i n ac t s t hat vi o l at ed t h e A ct
. The de fe nda nt s w e r e i n t he b us i ne s s o f b uyi ng ands e l l i ng n aturalgas f

or prof i ton beh al f

of t h e W estD esk at C orali n H ou st on , T exas. The t r ad e r s o n t he W e s t D e s k t r ad e d nat ur al ga s at s e ve r al l o c at i o ns i n t he
w est ern pa rtof

t h e U n i t ed S t ates. D en et t e Joh n son w as t h e hea d of t h e W est T radi n g D esk at C oral
. D i zona , C ou rt n ey M oore, J oh n T racy, an d R obertH arp w ere al lt raders on t h e W estT radi n g D esk at C oral
. K el l y D yer w as an an al yst
o n t he W e s tTr ad i ng D e s k. The c o m pl ai nta l l e ge d t hatf rom O c t o be r2 00 1 t hr o ugh J une 2 00 2, t he defenda n t s enter ed i n t o t ran sact i on s c al l i n g f or t h e d e li v e ry of n aturalgas on behal f of C or al
. Th e t r ansac t i ons ati ss ue ar e c al l ed “ physi c al” t r ades of nat ural g a s in in te r s ta te co m m e r c e . P h y s ic a l tr a d e s r e q u i r e t h e d e liv e r yo f a s p e c ific
am o unto f

na t ur alg as on a greed u po n da ys dur i ng t he f o l l o w i ng m o nt h. The pri ce of a ph ysi calt rade i s ei t h er agreed u pon at t h e t i m e of t h e t rade, a “ f

i xed pri ce” or setby a pu bl i shed i n dex , cal l ed an i n dex p ri ce. T h e defen da n t s’du t i es Case: 08-20418 Document: 00511004221 Page: 2 Date Filed: 01/14/2010N o. 08- 20418

3 i n cl u ded report i n g t h e pri ce an d vol u m e data of t h ei r t rades t o report i n g servi ces t h at gen e ra te d n a t u ralgas pri ce i n di ces, such a s Insi d e FER CG as Market R eport(“I

F ERC” ) a nd Natural G as Int el l igence (“NGI ” )
. The s e pub l i c at i o ns w oul d s ol i c i tt hi s dat a duri ng “bi dw ee k, ” w hi c h w as ge ner al l y t he l as tf ive bus i n e s s d a y s o f a m o n t h
. Th e e d i t o r s o f t h e s e p u b l i c a t i o n s wo u l d r e c e iv e t he d a ta fr o m th e tr a d e r s a n d p e r fo r m a n a n a ly s is o n th e d a ta
. B a s e d u p o n th e ir
ana l ys i s , t he e di t o r s w o ul d d e t e r m i ne a n i nde x pr i c e . An index p ri c e i s t he edi t or ’ s “ opi ni on o f

a v al ue t hat w oul d r epr es ent a c ent r alval ue f ornat uralgas d u ri n g th a t bidw ee k pe ri od i n tha t m a rk et. ” T h e C o mmi s s i o n a l l e g e d t h a tt h e d e fe n d a n t s s u b mi t t e d p r i c e a n d v o l u me da t a to I

FERCa nd NGI

tha t w as no tb as e d o n a c t ualt r ad e s . Thus , t he C o mmi s s i o n c h a r g e d t h a t t h e d e fe n d a n t s k n o w i n g l y d e l iv e r e d p r i c e a n d v o l u me da t a to t h e report i n g servi ces t h at w as kn ow i n gl y fal se ori n accurate i n vi ol ati on o f § 1 3( a) ( 2)
. The Com m i s s i o n f ur t he rc har ge d t hatt he pur po s e o f t hi s fal se report i n g w as t o att em pt t o m an i pu l ate t h e na t u ralgas pri ce i n di ces i n vi ol ati on of § 13 (a)( 2 ). F ive of th e six d efen d a n ts sett le d w ith the C om m i ssion pr i or to tr ia l, le a v in gD iz o n a a s th e o n lyre m a in in gd e fe n d a n t. A tt h e j u ry t ri al , the C om m i ssi on p u ton ev i den ce that, d u ri n g bi dw eek of
e a c h m o n t h , t h e t r a d e r s w o u ld s e n d D y e rth e ir“m a r k ,” w h ic h w a s e a c h tr a d e r ’s est i m ate as t o w h at t h e i n dex pri ce w ou ld b e th e f ol l ow i n g m on t h
. A f t er r ec eivi ng t he tr ader s’m ar ks, D yerw oul d send an em ai lto the t r ader s t hathad
a c har tw i t h i nf

o r m at i o n a bo utt he de l ive r y l o c at i o ns . Fo re ac h de l ive r y l o c at i o n, t he t r ader ’ s m ar k ( es t i m at ed pri c e) w as l i st ed i n t he f i r stc ol um n and t he next t w o colum n s i n di cat ed w h et h er a hi gh er (“ U p”) or l ow er (“ D ow n ” ) i n dex pri ce w oul d be “ G oo d” or “ B ad” f or t he W es t D es k’ s boo k. A t t ac hed t o t hi s em ai lw as a s pre adshe etf

ort he t r ader s t o i npu tt hei rt r ade dat a f oral lf i xed- pri c e b as el oad t rades t o be report ed to I FERCa nd NGI
. Th i s s pread sheet, w h i ch w as a sha red docu m en ton the W estD esk’ s c om pu t er netw ork, w as ci rcul ated b y em ai lf rom Case: 08-20418 Document: 00511004221 Page: 3 Date Filed: 01/14/2010N o. 08- 20418

4 t rader t o t rader. A f t er al lt h e t raders i n pu t t h e ir t rade d ata, t h e spreadsh eet
w as sent by facsi m i l e t o I FERCa nd NGI
. T h e e d ito r s o f th e p u b lic a tio n s w o u ld perf orm an a n al ysi s on the da t a report ed by t h e traders an d d et erm i n e t h e i n dex p r ic e . Th e bul k of t he C om m i ss i on’ s evi denc e had bee n pro duce d by C or al p u r s u a n tto a s u b p o e n a a n d w a s a d m i t t e d a ttr ia l t h r o u g h th e C o m m is s io n ’s i nve s t i ga t o ra s a s um m ar y w i t ne s s , M ar y K am i n ski , w ho s um m ar i z e d t he
vo l u m i n ou s ex h ib i ts. T o sh ow th a t D i zo n a a ttem p ted to m a n i p u l a te the m a rk et, K a m in s k i co m p a r e d th e tr a d in gd a ta D iz o n a in p u t in to th e m o n t h ly sp rea d sh ee ts th a t w ere s en t to th e n a tu ra lg a s p u b l i ca ti on s w i th the trad e d a ta l i st ed i n E xh ibi t27. E xh ibi t27 w as a spread sheet that the C om m i ssi on asser t ed
c o nt ai ne d t he a c t ualt r adi ng da t a f o rt he r e l e va ntt i m e pe r i o d. Kam i ns ki t es t i f i ed t hath er com p a r i so n of t he dat a r eve al ed t hat300 of t he 304 nat ural ga s t r ad e s r e po r t e d t o t he pub l i c at i o ns f o rD i z o na’ s assi gnedt r ad i ng l o c at i o ns w e r e n o t “ a c tu a l” C o r a l tr a d e s . T h e C om m i ssi on al so cal l ed an ex pert, D r. E l u d R on n , a f i n an ce prof

essor att he U nive r s i t y o f

T e xa s and an e xp e r ti n t he f i e l d o f e ne r gyf

i nanc e . Dr. Ronn
w as r e t ai ne d t o de t e r m i ne w he t he rt he r e w as a b i as i n t he traders’r e po r t i ng procedu re att h e W estD esk an d w h et h er i tw as “ syst em ati c i n na t u re. ” D r. R on n t est i f

i ed the W estD esk report ed i n a w ay that w o u ld p osi t ivel y af fect C or al ’ s ear ni ngs, as i ndi c at ed b y D yer ’ s “ goo d” i ndi c at or s, appr oxi m at el y 81 per c entof

the t i m e. I n ot herw or ds, t he bi as w as i n t he di r ec t i on s ugges t ed by D ye r ’ s e m ai lm e s s ag e t hati ndi c at e d whet he rt he “ up” o r “ do w n” pr i c e m o ve m e nt
w o u ld b e “g o o d ” o r“b a d .” D r . R o n n fo u n d th a t th e in a c c u r a te d a ta co n s is te n tly
s ke w e d i n Cor al ’ s fav o rs ho w e d b i as . I n a dd i t i on , D r. Ronn t e s t i f i e d t hatt he vol u m e of

na t u ral gas report ed w as h i gh er t h an t h e vol u m e act u al l y t raded
. D r. R on n deter m i n ed that t h e “ excess [ t radi n g vol u m e] report ed w as an yw h ere f rom Case: 08-20418 Document: 00511004221 Page: 4 Date Filed: 01/14/2010N o. 08- 20418

In deed, “[t]here was actu ally oneca se whe n the excess was 200 0 percent” higher than 1 actu al C or al tr a din gvolu me s. 5 80 t o s eve r alhun dre d per c ent
. ” O n c r os s exam i nat i on, D r . R onn c l ar i f i ed t hat 1 h i s “rep ort w a s f

or th e W est T ra d i n g D esk as a w h ole. T h e n u m b e r s th a t I
r e po r t e d t hi s a f

t e r no o n wer e s pe c i f

i c t o t he l o c at i o ns o f t he de fe nda nt
. ” The de l ive r y l o c a t i o ns D r . Ronn e xa m i ne d wer e t he l o c at i o ns a tw hi c h Di z o na t r ad e d. A d d itio n a lly , th e C o m m is s io n s u b m itt e d tw o a u d io ta p e s o f p h o n e ca lls in
w h i ch D i zona w as di scussi n g t rade d ata t h at he w ou l d report to th e i n dex
com pi l ers. O n one au di ot ap e, D i zona spoke of report i n g t rade d ata t o I FERC , respond i n g, “ I’ m rep ort i n g t h e index es. ” O n an ot h er aud i ot ap e, D i zona t al ked t o Car o lTay l o r , a t r ad e ri n Cana da , a s ki ng w he r e s he w ant s t he pr i c e , a nd s he
r es ponded “ l ow . ” D i zo na t hen l aughed and as ked i f “ a dol l arf i f t y w oul d be gr eat f or you?” H e f

u rt h er s t ated, “ L etm e t estour book an d i f, i f, i f I can reporti tl ow f oryo u I w i l l
. ” Tayl or re sp on ded, “ Th atw oul d be gr eatbe c ause w e do n’ thave
e no ugh t o ev e n re po r tt hi s m o nt h unf o r t unat e l y. ” To whi c h Di z o na r e s po nde d,

“You c an m ak e i tup, c an’ ty o u? ’Ta yl o rs ai d, “W e can , b utw e do n’ tf e e lr i ght ab o utt hat
. ” Di z o na t he n s ai d, “ O h, yo u c r az y Canad i ans . ” Ato ne po i nt , D i z o na sa i d he w oul d hel p her and be her “ i m m or alper so n, ” appar ent l y by r epo r t i ng a l ow t r ade. H e a l so r ef er r ed t o “ H ous t on, ” w hi c h w as w her e he w as l oc at ed, as d oin g th e “d i rty w ork f or [h er]. ” D i zona di d n ott est i f y or c al lan y factw i t n esses . H e di d cal lP rof essor Joseph K al t , an econom i c c on sul t an tan d exp ertin n aturalg as a n d oi l
. Professor K al tt es t i f

i ed t hath e l oo ked f

orbi as bet w ee n w hatC or alr epo r t ed and t he ac t ual p ri ces i n t h e m arket. H e t est i f i ed that any di f

ference betw een t h e W estD esk
r epo r t i ng and t he i ndex c om pi l er ’ s aver age w as “ l es s t han a penny of t he ave r age i n t he m ar ket
. ” H i s opi ni on w as t hatth e p ri ces r epo r t ed o n t he C or al
s p r e a d s h e e t w e r e “a ll rig h t in th e ra n g e o f e v e r y b o d ye ls e ” in th e m a r k e t. Case: 08-20418 Document: 00511004221 Page: 5 Date Filed: 01/14/2010N o. 08- 20418

6 D uri ng t he j ury’ s del iber at i ons , i ts entouta not e t o t he c our ti nqui r i ng:

“ I n q ue s t i o n no . 1 d oe s ‘ kno w i ngly de l ive r e d f o rt r ans m i s s i o n’m e an t hathe [ D i zo na] prov i d ed in f or m at i on t o b e t r ansm i t t ed o rt hathe m ade t he ac t ual t r ans m i t t al ? ” I n r e s po ns e , t he c o ur tdi r e c t e d t he j ur y t o r e t ur n t o t he pe r t i ne nt pa rtof t h e i n st ructi on s. T h e j u ry subsequ en t l y f ou n d that D i zona ha d n ot kno w i ngl y de l ive r e d afal s e r e po r tpur s uantto q u est i o n o ne . The j ur y di d, h ow ev e r, fin d t h at D i zona ha d att em pted t o m an i pu l ate t h e m arket pri ce of
n a tu r a l g a s o n e ig h t o c c a s io n s . B ot h parti es f

i l ed m ot i on s for j u dg m en tas a m att er of l aw . Th e di st ri ct
c our tgr ant ed D i zo na’ s m ot i on and s etas i de t he j ury ver di c tf i ndi ng t hathe had
a tte m p te d to m a n ip u la te th e m a rk e t p rice of n a tu r a l g a s in v iola tion of § 13(a) ( 2)
. T h e d i st ri ctcou rtd en i ed t h e C om m i ssi on ’ s m ot i on . T h e C om m i ssi on n o w a p p e a ls
. I I
. S UFF I CI ENCY OF T HE EVI DENCE A. At t e m pt e d M ani pul at i o n The C om m i ss i o n c o nt e nds t hatt he di s t r i c tc o ur te r r e d i n g r ant i ng D i zona ’ s m ot i on f

or j u dg m en tas a m att er of law
. T h i s C ou rtrevi ew s a di st ri ct
c our t ’ s gr antof

j udgm entas a m at t erof l aw de novo, appl yi ng t he s am e l egal
s ta n d a r d a s th e d is tr ic t c o u r t. Pri ce v. Marathon Ch ees e Corp . , 119 F. 3d 330, 3 3 3 ( 5 th C i r. 19 9 7 ). Ju d gm en t as a m a tter o f l a w is a p p rop ri a te after “a p a rty h a s be en f

u l l y h ea rd on an i ssu e d u ri n g a j u rytri a lan d the co u rt f i n d s th a t a
reasona bl e j u ry w ou l d not h ave a l egally suff i ci en t evi den t i ary basi s t o f i n d f or t he pa r t y o n t hati s s ue . ” Fe d. R. Ci v. P. 5 0( a)
. “ I n e va l uat i ng s uc h a m o t i o n, t he
c o ur tm us tc o ns i de ra l lo f t he e vi de nc e i n t he l i ghtm o s tfav o r ab l e t o t he
no nm o va nt , dr awi ng al lfac t uali nfe r e nc e s i n fav o rof t he no n- m o vi ng pa r t y, a nd l eaving credibi l i t y determ i n ati on s, t h e w ei gh i n g of evi den ce, an d the draw i n g of l eg i ti m a te i n feren ces from the fa cts to t h e j u ry . ” Pri ce , 1 1 9 F. 3d at333. A l t h o u g h th e co u r t “ s h o u ld re v ie w th e re c o r d a s a w h o le , it m u s t d is r e g a r d a ll Case: 08-20418 Document: 00511004221 Page: 6 Date Filed: 01/14/2010N o. 08- 20418

7 ev i d en ce fav ora b l e to th e m ov i n g p a rty th a t t h e j u ryi s n ot req u i red to be l i e ve ”

— t hati s , t he Cour t“ s ho ul d g ive c r e de nc e t o t he e vi de nc e fav o r i ng t he
n o n m o v a n t a s w e ll a s th a t e v id e n c e s u p p o r tin gth e m o v in gp a r tyth a t is
u n contradi c t e d an d u n i m pea ched , at l east t o t h e ext en tt h at t h at evi den ce c om es from d i sintere sted w i tn ess es.” R e e v e s v . Sande r s o n Pl um bi ng Pr o ds
. , I nc . , 530 U .S . 1 3 3 , 1 5 1 (2 0 0 0 ) (in te r n a l q u o ta tio n s o m itt e d ). The Com m i s s i o n ar gue s t hatt he di s t r i c tco ur ter r e d i n s e t t i ng as i de t he ju ry ’ s v e rd ict th a t D iz o n a h a d a tte m p te d to m a n ip u la te th e m a rk e t p rice of a
com m odi t y i n i n t erst ate c om m erce i n vi ol ati on of 7 U
. S
. C
. § 13( a) ( 2 ). Sect i on 1 3 (a)( 2 ) forbids “[ a ]nype rson to m a n ip u l a te the m a rk et or a ttem p t t o m ani pul at e t he pr i c e o f any c o m m o di t y i n i nt e r s t at e co m m e r c e . ” The j ur y f o und t h at, on ei gh tocc asi on s, D i zona ha d att em pted t o m an i pu l ate t h e m arket pri ce o f n a tu r a l g a s in in te r s ta te co m m e r c e . Th e di st r i c tc our ts et as i de t he ve r di c t , f i ndi ng, am ong o t hert hi ngs, t hat th e ev id e n ce d idn o t p ro v e th a t D izo n a co m m itted a n a ct th a t v iola te d §1 3 (a )(2); i ns t e ad , i ts t at e d t hatt he e vi de nc e de m o ns t r at e d t hat D i z o na w as s i m pl y givi ng in -h o u s e e s tim a te s to h is s u p e r io r s . T h e C o m m i s s io n s h a r p lyd is p u te s th is
c harac t er i zat i on o f

t he e vi denc e. Al t hough t he C om m i ss i on acknow l edge s t hat D i zona provi ded D yer h is in -h o u se es t i m ates, w h i ch are his t rader’ s m arks on pri ces, t h ose es t i m ates w ere not t h e basi s f or t h e charge of

att em pted
m an i pu l ati on . Th e C om m i ssi on asser t s t h at t h e evi den ce show s t h at af t er D yer r e c e ive d t he t r ad e r s ’m ar ks , she w o ul d r e s po nd byem ai lw i t h i nde x di r e c t i o ns ( “ good ” an d “bad”)
. Th e charge i s t h at, af t er receivi n g t h e i n dex di rect i on s, D iz o n a w o u ld re p o r t b ia s e d p r ic e a n d v o lu m e tr a d e d a ta w ith re s p e c t t o h is
n aturalgas t rades i n accor da n ce w i t h D yer’ s di rect i on s. Th e C om m iss ion f urt heras se r t s t hat t hi s dat a w as l abel ed and i nt ended t o b e t r eat ed as ac t ual tr a d e d a ta

— n o t a s in -h o u s e e s tim a te s . Case: 08-20418 Document: 00511004221 Page: 7 Date Filed: 01/14/2010N o. 08- 20418

8 The Com m i s s i o n c o nt e nds t hatt he r e i s a w e al t h o f e vi de nc e t o s upp o r tt he j u ry’ s verdi ct
. Th e C o m m i ssi on asser t s t h at “ D i zona ’ s r eported t rades w ere al m os tal w ays fal se and w er e c ons i st ent l y bi as ed i n favor of pri c e c hanges t hat
w o ul d p r o f

i thi s e m pl o ye r . ” The Com m i s s i o n po i nt s t o t he a udi o t ap e o f D i z o na vo l unt e e r i ng t o fal s i f y t r ad e da t a f

o rCar o lTay l o r , a t r ad e ri n Cana da
. The Com m i s s i o n r e l i e s o n Ka m i n s k i ’ s t e s t i m o n yt h a ta c o m p a r i s o n o f t h e t r a d i ng dat a c ont ai ned i n t r i alex hibi t27 w i t h d a ta repor t ed t o t he nat uralgas pu bl i cat i on s r evealed t h at m ostof t h e report ed d ata w as fal se. Th e C om m i ssi on al s o r e l i e s o n a “ f

o r e ns i c e - m ai lt r ai l” de m o ns t r at i ng D i z o na’ s r o l e i n s ubm i t t i ng t he da t a andi t s pr o f

fe ro f D i z o na’ s i nt e r r o ga t o r y ad m i s s i o ns t hathe s e ntt r ad i ng d a ta to th e in d e xco m p ile r s . I n r e s po ns e , D i z o na c o unt e r s t hatt he di s t r i c tc o ur tdi d no te r ri n g r ant i ng hi s m o t i o n f

o rj u d g m e n ta s a mat t e ro f l a w b e c a u s e t h e r e wa s i n s u f f i c i e nt
e vi de nc e t o s us t ai n t he j ur y’ s v e r di c to nc e t he he ar s aye vi de nc e ha s b e e ne xc i s e d. D i zona contends that cert ai n exh ibi t s t h e C om m i ssi on subm i t t ed i n t o evi den ce c o n s t i t u t e h e a r s a ya n d t h a tt h i s o b j e c t i o n w a s p r e s e r v e d i n d i s t r i c tc o u r t
. As D i zo n a ass erts, “i n de ci d i n g w h eth er [a j u d gm en t as a m a tter of l a w ] sh o u ld h ave been aw arded , [w e] m u stf i rstexci se i n ad m i ssibl e evi den ce; such evidence

‘ con trib u tes n oth i n g to a leg a l l y su ff i ci en t ev i d en ti a ryba sis. ’” Hodges v. Mack Trucks, I

n c. , 474 F. 3d 188, 193 ( 5t h C i r . 2006) ( quot i ng W ei sgram v. Marley, 528 U
. S. 440, 454 (2000) )
. Thu s, w e m ustdet er m i ne w het hert he e vi denc e w as pr o pe rl y ad m i t t ed befor e t h e j u ry. W e revi ew a di st ri ctcourt ’ s evi den t i ary rul i ng fo ra b u s e o f d is c r e tio n . Un ite dS ta te s v . D ix o n , 132 F
. 3d 192 , 197 -9 8 (5t h C i r. 1 9 9 7 ). It i s u n d i sp u ted tha t C ora lpr od u ced the ev i d en ce in q u estion pu rsu a n t t o a s ubpoena i ss ued by t he C om m i ss i on. Exh ibi t s num ber ed 17 t hro ugh 24 i nc l ude d t he em ai l s f r o m t he anal ys tt o t he t r ad e r s a nd t he e m ai l s f o r w ar di ng th e a tt a c h e d s p r e a d s h e e t w ith th e irre p o r te d tr a d e s a n d th e ir m a r k s . E x h ib it Case: 08-20418 Document: 00511004221 Page: 8 Date Filed: 01/14/2010N o. 08- 20418

E xhibit 2 8 was also an Excel spreadsheet, butthe trade data inth at exhib it did not 2 involve the tr ades at issue in this trial.

I n its replybrief, the Commission argues that “many of the documents produced by 3 Cor al were a dmissibl e o n ground s other thanth e b usiness records e xc ep t ion to the hearsay rul e.” However , we note that the C ommissiondoe s not set forth any specific groun d th at would allow for admission of E xhibit 2 7 except that it fell under the business records exception or thatitwas not offered to prove the truthof the matter asserted
.

Wenote that, after Dizon a’s challe nge toth e C ommission’s attorney’s explan atio n 4 of how E xhibit 2 7 wa s created, the C ommissionoffered no evidence to e stablish that the requirements of Rule 803 (6) h ad b eenmet. 9 27 i s a n Exc e ls pr e ad s he e tt hatCor alpr o duc e d i n r e s po ns e t o a s ubp o e na f o rt he
r ec or d of

C or al ’ s t r ades duri ng t he r el evantt i m e pe r i od. D uri ng a pr et r i al 2 he ar i ng, D i z o na o bj e c t e d t o t he a dm i s s i o n o f t he s e e xhi bi t s , a s s e r t i ng t hatt he C om m i ssi on ha d fai l ed to dem on st rat e t h at t h e evi den ce m ett h e bu si n ess r ec or ds exc ept i on t o t he hear sa y r ul e pur suantto R ul e 8 03( 6) of t he Feder al R u l es of E vi den ce. D i zona ’ s c ou n selob j ect ed as fol l ow s: “W e contend they a re n otbu si n ess recor ds. T h e y w e re not kept i n t h e ordi n ary course of bu si n ess. T h ey w ere not kep tby som eon e. Th ey don ’ tm eetan y of t h e cr i t eri a of

[R u l e] 8 0 3 (6 ) o r(7 ). ” T h e d is t r ic tc o u r tr e s p o n d e d : “I m ig h t a g r e e w it h y o u , b u tI d o n ’t th in k th a t’s th e cr ite r ia fo ra d m i s s i o n a n d th a t’s w h yI’v e o v e r r u le d it.” Al t ho ugh i ti s c l e art hatt he di s t r i c t c o ur t o ve r r ul e d t he he ar s ayo bj e c t i o n, t he b a sis for ad m i ssion i s u n c le a r. S u b seq u en tl y, at t ri a l , D i zo n a ob j ected to 3 E x h ib i t 27 du ri n g th e testi m on y o f M a ryK a m i n sk i
. D i zo n a ’ s cou n sel ag a in
o bj e c t e d b as e d o n he ar s aya nd r e l e va nc e . D ur i ng a c o nfe r e nc e a tt he b e nc h, t he
c o u r t i n q u ir e d r e g a r d in gw h o c o m p il e d th e d o c u m e n t , a n d th e C o m m is s io n ’s att orney a sser t ed that C oral ’ s i n f orm ati on t echn ol ogy d epa rt m en tcom p i l ed Exhibi t2 7. Di z o na’ s a t t o r ne y r e s po nde d, c o unt e r i ng “ N o, i tw as no t , y o ur H o no r . ” The c o ur tt he n s t at e d “l e t ’ s j us ta s s um e t hatt hat ’ s t r ue . ” The

4 C om m i ssi on ’ s att orney then st ated t h at: “ C oralm ai n t ai n s a database of t rades
a n d th a t s y s te m is , I b e lie v e , th e E n d u r e s y s te m . A n d in o r d e rto d e v e lo p th is Case: 08-20418 Document: 00511004221 Page: 9 Date Filed: 01/14/2010N o. 08- 20418

10 E x c e l s p r e a d s h e e t, th e yd o w n lo a d e d in fo r m a tio n d ir e c tlyo u t o f E n d u r e in to th is Exc e ls pr e ad s he e t
. ” The a t t o r ne y’ s a s s e r t i o ns a ppe art o a t t e m ptt o l ayt he f o unda t i o n f

o ra dm i s s i o n b as e d up on the bus i ne s s r e c o r ds e xc e pt i o n t o t he h e a r s a yr u l e u n d e rR u le 8 0 3 (6 ). H o w e v e r , a s D iz o n a h a s a r g u e d , c o u n s e l’s
a s s e r tio n s d o n o t c o n s tit u te e v id e n c e a n d th u s ca n n o t la yth e fo u n d a tio n for R u le 8 0 3 (6 ). D i zona assert s t h at becau se t h e C om m i ssi on di d not cal la C oralem pl oyee w i t h persona lkn ow l edg e t o est abli sh the docu m en t s as busi n ess recor ds u n der R u l e 8 0 3 of th e F ed era lR u l es o f E vid en ce, th e ev i d en ce w a s h e a r sa y. W i th
r e s pe c tt o R ul e 803 ( 6) , “ [ t ] he ex c e pt i o n re qui r e s t hate i t he rt he c us t o di an o f t he bus i ne s s r e c o r ds o r‘ o t he rq ual i f i e d w i t ne s s ’ l ay a f

o unda t i o n be f

o r e t he r e c o r ds
a re a d m i tted.” Un i t e dS t a t e s v . B r o wn , 5 5 3 F .3d 7 6 8 , 7 9 2 (5t h C ir. 2 0 0 8 ). H ow eve r , “ [ t ] her e i s no r equi r em entt hatt he w i t nes s w ho l ays t he f oundat i on be th e a u th or of the reco rd or b e a b l e to p erso n a l l y a tt e s t to i ts accu ra cy . ” I d. (f o o t no t e a nd i nt e r nalq uo t at i o n m ar ks o m i t t e d)
. “A qual i f i ed w i t ne s s i s o ne w ho c an expl ai n t he r ec or d keepi ng sy st em of t he o r gani zat i on and vo uch t hat th e req u i rem en ts of R u l e 8 0 3 (6) a re m et. ” I d. (f oot n ot e an d i n t erna lqu ot ati on m a rk s om i tted). R u l e 8 0 3 (6) p rov i d es, i n pe rti n en t pa rt, tha t: Am em oran du m , report , recor d, or da t a com pi l ati on , i n an y f orm , of ac t s , e ve nt s , c o ndi t i o ns , o pi ni o ns , o rdi ag no s e s , m ad e a to rne art he ti m e b y, or f

rom i n form a ti on tran sm itt e d by , a p erso n w i th kn ow l edg e, i f

kep ti n th e course of a regul arl y cond u ct ed bu si n ess a ctivity, a n d i f i t w a s th e regu l a r p ra cti ce of tha t bu sine ss a ctivity t o m ake t he m em or andum , r epo r t , r ec or d ordat a c om pi l at i on, al las show n by the test i m on y of the custodi an or ot h er qua l i f i ed w i t n ess,

. . . u n l ess t h e source of i n f orm ati on or t h e m et h od or ci rcum st an ces o f p r e p a r a tio n in d ic a te la c k o f tr u s tw o r th in e s s . Case: 08-20418 Document: 00511004221 Page: 10 Date Filed: 01/14/2010N o. 08- 20418

This Court has foun d the use of a su mmary witness appropriateincomplexca ses to 5 su mmari z e volu minous recor ds
. E.g., United States v. Ollison , 55 5 F .3d 1 52, 162(5th Cir. 2 0 0 9). Werecogniz e th at a governme nt agent canserve as a“qualifie d witness” forpurposes

6 of Rul e8 0 3 (6). E
. g., United States v. Veyt ia-Bravo, 6 0 3F .3 d 1 1 8 7 , 1 1 9 1 -9 2( 5 thC ir
. 1 9 7 9). Nonetheless, to be a qualified witness the government agent must still be able to expl ainth e recordke ep in gsyst eman d voucht hat the require me ntsof the ruleh a d b ee nmet. See id. (explainin g that the re quirements of Rule 803 (6) were met by the agent’ s testi monyth at the recor ds were compil ed p ur suant toregulation s that re quired the dealer to make a co nte mp or an eou s recor d of e achsalea s part of it s regular cours e of b u sin es s)
. See also C

ono co 11 In th e ca s e a t b a r , K a m in s k i, th e C o m m is s io n ’ s in v e s tig a to r , te s tifie d o n ly
as a s um m ar y w i t nes s. K am i nskidi d n oti nt ervi ew an y C or alem pl oye e o rhave 5 anykno w l e dg e re ga r di ng t he ke e pi ng o f t he r e c o r ds
. On c r o s s e xa m i nat i o n, K am i ns kia dm i t t e d t hats he di d no t k n ow w he t he rt he s pr e ad s he e tw as m ad e at ornea r t h e t i m e of t h e tra d e . Sh e al so adm i t t ed that she di d n otkn ow w h et h er t h e spreadsh eetw as m a d e b y a person w i t h kn ow l edg e of t h e t rade. S h e ha d n o i n f

orm ati on abou thow t h e rec ord w as produ ced. K am i n skit est i f i ed t h at her on l y previ ou s experi en ce w i t h na t u ralgas com m odi t i es w as as a broker t radi n g t h ese c om m odi t i es over t h e ph on e. I n deed , she h ad nev er i n vest i gated
an i r r e gul ar i t y i n na t ur alg as t r ad i ng dur i ng he rt i m e w i t h t he Com m i s s i o n. M oreover, t h e di st ri ctcourti n st ructed t h e j u ry t h at K am i n ski ’ s t e s t i m o ny “i s not i ndependentev i denc e of the s ubj ec tm at t eran d i s onl y as val i d and r el i abl e a s t h e un derl yi n g ad m i t t ed evi den ce i tpu rport s t o s u m m ari ze. ” U n der t h ose ci rcum st an ces, K am i n ski , i n her rol e as a sum m ary w i t n ess, w as not a qu al i f i ed
w i t ne s s w ho c o ul d e xp l ai n Cor al ’ s r e c o rd ke e pi ng s ys t e m a nd v o uc h t hatt he
r e q u ir e m e n ts o f th e r u l e h a d b e e n m e t. S e eB r o wn , 553 F. 3d at792- 93 ( e xp l ai ni ng t hata l t ho ugh t he e xp e r tw i t ne ss ha d un di s put e d k no w l e dg e a nd exp ert i se w i t h res pect t o t h e bu si n ess’ s com pu t er program , t h e expert w as not
a qua l i f i e d wi t ne s s und e rRul e 8 03 ( 6) b e c aus e he ha d no know l e dg e o f t he busi nes s’ s r ec or d kee pi ng pr oc edur es or pra c t i c es )
. W e t her ef or e c onc l ude t hat th e ex h ib its w e re n o t p ro p e rlya d m itted u n d e r R u le 8 0 3 (6 ). 6 Case: 08-20418 Document: 00511004221 Page: 11 Date Filed: 01/14/2010N o. 08- 20418

v. Dept . of Energ

y, 99F. 3 d 38 7 , 39 1 (F ed . C ir . 19 9 6) (expl ainin gth at “a s lo n gas the witnes s understan ds thesy stem u sed topre pare the recor ds,” th e witness is qualified tolay the foun dation for the admissio n of records under Rule 803 (6)). Inth e instant ca se, the record is entirelydevoid of such testimony and thu s the nece ssarypre dicate wa s not l aid for a dmission of E xhibit 2 7. 12 N o ne t he l e s s , i n i t s r e pl y br i e f and a to r ala r gum e ntb e f o r e t hi s Cour t , t he Com m i s s i o n a s s e r t e d t hatbe c aus e i tdi d notre l y o n t he ev i de nc e t o e s t ab l i s h t he t ruth of t h e m att er ass ert ed, t h e evi den ce d id not c on st i t u t e hea rsay. M ore s pe c i f i c al l y, t he Com m i s s i o n a s s e r t e d t hatt he e nt r i e s D i z o na m ad e i n t he
s pr e ad s he e t s i n Exhibi t s 1 7 t hr o ugh 2 4 w e r e fal s e a nd t hus , i tw as no to f fe r i ng t h ose exhibi t s t o prove t h e t ruth of t h e m att er ass ert ed. H o w e v e r, even as sum i ng argue ndo t hata s s e r t i o n i s co r r e c t , i tdoe s notappl y t o Exhibi t2 7, t he spread sheet t h at C oralprodu ced i n res pon se t o a subp o e n a f or i n f orm ati on r e ga r di ng t r ad e s dur i ng t he r e l e va ntt i m e pe r i o d. Kam i ns kic o m pa r e d t he

“ ac t ual” t r ade dat a i n t hat spr eads heet w i t h t he dat a r epo r t ed t o t he nat uralgas pub l i c at i o ns t o de m o nst r at e t hatD i z o na hads ubm i t t e d fal s e i nf o r m at i o n. Indeed , i n i t s bri ef, t h e C om m i ssi on contends that t h ere i s a “w eal t h of evi den ce” t hat s upp o r t s t he j ur y’ s v e r di c t , s t at i ng t hat“ [ t ] he r e w as t he c o m pa r i s o n o f t he trad i n g d a ta con tain e d in
. . . E xh ib i t 27
. . . w i th C ora l ’ s rep orted da ta to I n s i de F E R C a nd NG I
. ” The r e f o r e , c o nt r ar y t o t he Com m i s s i o n’ s a s s e r t i o n, E x h ib it 2 7 w a s o ffe r e d fo rto p r o v e th e tr u th o f th e m a tt e ra s s e r te d
. W e r e c o gni z e t hat pr i o r t o t r i al t he Com m i s s i o n f i l e d am o t i o n r e que s t i ng t he d i st ri c tc o ur tt o f i nd t hatD i z o na hadw aive d hi s o bj e c t i o ns t o t he aut hent i c i t y o f t he C om m i ss i on’ s exhibi t s. Pu r suant t o Sout her n D i st r i c tLoc al R u l e 4 4
. 1 , the distri ct cou rt f ou n d tha t D i zo n a h a d w a iv e d h is au th en ti ci ty Case: 08-20418 Document: 00511004221 Page: 12 Date Filed: 01/14/2010N o. 08- 20418

SeeS.D. L .R. 44.1 (“A party requiring authenticationof anexhib it must notifyth e 7 offeringparty in writin g withinfive days after the exhib it is list edan d madeavail able. F ailureto obj ect ina dvanceof the trial inwritin gc once de s authenticity .”). When Dizon a’s coun sel obj ected to the exhib its b ecau se theywere not kept in the 8 ordin ary c o ur s e of b u s in e s s an d thu s di d no t m e e t th e r e quir e m e nt s of Rul e 8 0 3 (6), th e district stated: “Imight agree with you, but I don’t think that’s the criteria for admissio n and that’s whyI’ve overrul ed it.” Th e court’ s respon se doe s not indic ate that it was admittingth e exhib it s un d e r Rul e 8 0 3 ( 6)
. C l e arly , th e h e ar s ay obj e ctio n b a s e d o n Rul e 8 0 3 ( 6) wa s no t waived. 13 o bj e c t i o ns . H o w e ve r , w e do not i n t e r pr e tt he di s t r i c tc o ur t ’ s r ul i ng as f i ndi ng 7 th a t th e ex h ib its h a d b e e n a u th e n tica te d forp u rp o se s o f R u le 8 0 3 (6 ). 8 I n any eve nt , i n t he c ont extof R ul e 8 03( 6) , t hi s C our t has e xpl ai ned t hat “au th en ti ca ti on a l on e i s n ot en ou gh
. ” Uni t e d St at e s v . Rob i ns o n, 700 F
. 2d 205, 2 1 0 ( 5 t h Ci r . 1 9 8 3 )
. I n R obi n son , t h e defen da n tobj ect ed to t h e adm i ssi on of h a n d w ritte n notes t h at had been t ak en du ri n g a coun t y board of sup ervi sors m e e tin g . I

d. T h e n otes h a d be en i n trod u ced alon gw ith a p a ck et of cou n ty d o c u m e n ts th r o u g h th e co u n tyre c o r d s cu s to d ia n . I d. T h i s C ou rtexpl ai n ed t hat , al t hough t he not es had bee n pro per l y aut hent i c at ed, “[f ] orthe not es to be adm i ss ibl e und er R ul e 803( 6) , t he gov er nm ent al so had t o e st abl i sh t hat‘ i tw as th e reg u l a r p ra cti ce of tha t bu sin e ss a ctivity’to h a ve the n otes m a d e.” I d. (q u o tin gR u le 8 0 3 (6 )). Bec aus e t he g o ve r nm e ntfai l e d t o do s o , t hi s Cour tf o und th a t th e n o te s s h o u ld n o t h a v e b e e n a d m itt e d
. Id
. I n t h e i n st an tcase, t h ere w as no s how i ng t ha t itw a s C or al ’ s r egul arpr ac t i c e t o m ake Exhi bi t27. Acc o r di ngl y, t he a ut he nt i c at i o n r ul i ng s t and i ng al o ne i s i ns uf f i c i e ntt o m e e tt he requ i rem en t s of

R u l e 803 ( 6)
. W e t h erefor e c o n cl u de that t h e di st ri ctcourt
a b u s e d its d is c r e tio n in a d m itt in gE x h ib it 2 7
. W e m us tno w de t e r m i ne w he t he rt he e vi de nc e i s s uf f i c i e ntt o s upp o r tt he j u ry’ s verdi ctw i t h ou tconsi deri ng E xh ibi t27. A s previ ou sl y setf ort h , i n add i t i on t o t he s um m ar y w i t nes s’ s t es t i m ony, t he C om m i ss i on c al l ed D r . R onn as an e x p e r t w h o te s tifie d th a t t h e W e s t D e s k r e p o r te d in a w a y th a t w o u ld p o s itiv e ly Case: 08-20418 Document: 00511004221 Page: 13 Date Filed: 01/14/2010N o. 08- 20418

14 a ffe c t C o r a l’ s e a r n in g s , a s in d ic a te d b yD y e r ’ s “g o o d ” in d ic a to r s , a p p r o x im a te ly 81 percent of t h e ti m e. O n cr oss exam i n ati on , w h en speci f i cal l y asked w h et h er h e h a d a n a l y z e d D i z o n a ’ s i n d iv i d u a lt r a d e s , D r . R o n n r e s p o n d e d : “ I n my t e s t i m o ny t hi s a f

t e r n o o n , th o s e l o c a t i o ns w e r e t he t r ad i ng l o c at i o ns f o rw hi c h t he defenda n tw as res pon sibl e. So, I don ’ t kn ow i f t h at’ s responsi ve t o you r questi on o rno t
. ” Dr. Ronn f

ur t he re xp l ai ne d t hathi s “ r e po r tw as fo rt he W e s tTr ad i ng D e s k a s a w ho l e . The num be r s I r e po r t e d t hi s a f t e r no o n w e r e s pe c i f

i c t o t he l o c at i o ns o f

t he def

e nda nt
. ” I ta ppe ar s t hatt o t he e xt e ntt hatD r . Ronn consi dered the i n di vi du alt raders’ da t a, h e group ed D i zona ’ s an d H arp’ s t rades. I ndeed, D r . R onn t es t i f i ed t hatal t hough he at t r ibut ed c er t ai n t r ades t o D i zo na, he w as “ notex ac t l y c l earon t he r el at i ons hi p of M r . H ar p an d M r . D i zo na. I have
a s e ns e t hatt he y w o r ke d t o ge t he r , and s o t hats e ns e i s w hatc aus e d m e t o put t h i s t ogether as I di d i n T able 4. ” W h en asked w h et h er h e coul d “ t el l t h i s j u ry w h e th e r th is g e n tle m a n th a t’s o n tr ia l h e r e m a d e a n ye n tr yo n to a s p r e a d s h e e t,” D r. R on n resp on d ed tha t he “can n ot. ” Ad d i t i o na l l y , a s p r e v i o u s l ys e tf o r t h , t h e C o mm i s s i o n s u b mi t t e d t wo aud i o t ap e s o f pho ne c al l s i n w hi c h D i z o na w as di s c us s i ng t r ad e da t a t hathe
w ou l d report t o t h e i n dex com pi l ers. D i zona ’ s st atem en t s on t h e au di ot ap e are i nc r i m i nat i ng butt o o v ag ue t o s uf f i c i e nt l y s upp o r t the j u ry ’ s f i ndi ng t hathe at t e m pt e d t o m ani pul at e t he pr i c e of nat ur algas on ei ghto c c as i o ns . U nde ro ur de n ovo revi ew , w e are not persua ded t h at D r. R on n ’ s generalf i n di n g of

bi ased
r e po r t i ng atCor al ’ s W e s tD e s k a nd Di z o na’ s i nc r i m i nat i ng s t at e m en t s on t he aud i o t ap e a r e s uf

f i c i e ntt o de m o ns t r at e t hat D i z o na m ad e fal s e e nt r i e s i nt o t he
s pr e ad s he e t s t hatw e r e s e nt t o t he pub l i c at i o ns . W i t h t hi s e vi de nc e a l o ne , t he C om m i ssi on cann otshow t h at D i zona att em pted t o m an i pu l ate the m arket pri ce o f n a t u r a l g a s in v io la t io n o f § 1 3 (a )( 2 ). T h u s , w e a ff ir m th e d is t r ic tc o u r t ’s j u dg m en tvacati n g t h e j u ry’ s verd i ctw i t h respect t o t h e att em pted m an i pu l ati on c h a r g e . Case: 08-20418 Document: 00511004221 Page: 14 Date Filed: 01/14/2010N o. 08- 20418

Alt ho ugh the Commission raise s other argu ments, in view of our findingth at the 9 evidence wa s in sufficient to s us t ai n eith er charge , we need not reach the remainin g argu me nts
. 15

B
. D elive ryof F a l se R ep orts A s pre vi ous l y s etf

or t h, t he j ury r ej ec t ed t he al l egat i on tha tD i zo na had kn ow i n gl y del ivered fal se r eports t h at t en ded t o af fectt h e m ar k e t p ri ce of nat ur alg as i n v i o l at i o n o f § 1 3( a) ( 2)
. The Com m i s s i o n’ s t he o r y w as t hatD i z o na se ntt he s pre ad s heet s c ont ai n i n g th e fal se t r ades t o t he nat uralgas p u b li c a t io n s . A f

t e rth e v e r d ic t , t h e d is t r ic tc o u r td e n ie d th e C o m m is s io n ’s
m o tio n fo rju d g m e n t a s a m a tt e ro f la w . A s d is c u s s e d in s e c tio n II . A , s upr a, E xh ibi t27 w as i n ad m i ssibl e hea rsay. W i t h ou t t h e evi den ce of t h e act u alt rades i n E xhibi t27, t he e vi denc e i s i nsuf f i c i entt o de m ons t r at e t hat D i zo na had kno w i ngl y de l ive r e d f als ereport s t h at t en ded t o af fectt h e m arket pri ce of
n a t u r a l g a s in v io la t io n o f § 1 3 (a )( 2 ). T h u s , w e a ff ir m th e d is t r ic tc o u r t ’s j u dg m en tref

u si n g t o overtu rn the j u ry verdi ctw i t h res pect t o t h e del ivery of fal se r eports charge. 9 F o rt h e f

o r e g o i n gr e a s o n s , t h e d i s t r i c tc o u r t ’ s j u d g me n ti s A F F I RMED. Case: 08-20418 Document: 00511004221 Page: 15 Date Filed: 01/14/2010N o. 08- 20418

16 R E AV LE Y , J. , D i ss ent i ng:
I w o ul d r e nde rj udg m e nto f c o nvi c t i o n o n t he b as i s o f t he j ur y ve r di c t
. The d e fe n d a n t a r g u e s fo rth e a c q u itt a l, a n d th e p a n e l m ajo r itys o h o ld s , p r in c ip a lly be c aus e o f t h e i n a d m i s s ib i l i t y o f Ex h ib i t 2 7 a s b u s i n e s s r e c o r d h e a r s a y . The di st ri ctcourtadm i t t ed E xh ibi t27 i n to e v id e n ce, an d I s ee t h at as n o abu se of di s c r e t i o n. Thi s e xhibi tw as pr o duc e d b y t he def e nda nt ’ s em pl o ye ri n re s po ns e t o t he gover n m e n t ’ s s u bp oen a to del iver t h e rec ord of i t s t rades. Th e C om m i ssi on

m o ve d p r i o rt o t r i alr eques t i ng w aive rb y de fe ns e t o t he a ut he nt i c i t y o f t he

e xhibi t , a nd t he c o ur tr ul e d o bj e c t i o ns w e r e w aive d. T h e C om m i ssi on ’ s experi en ced i n ve stig atorexpl ai n ed that t h e pract i ce

w as f or defen da n tas t h e t rader t o t ran sm i thi s t rade data t o becom e t h e val u es

s h o w n o n E x h ib it 2 7
. T h e d e fe n d a n t r e c e iv e d th e d a ta b a s e m a d e fr o m h is

e- m ai l s, an d the da t aba se w as dow n l oad ed i n t o E xh ibi t2 7. W h i l e t h i s w i t n ess di d nothave per so nalknow l edge of d eta i l s of

ope r at i on o f

t hi s par t i c ul ar
c o m pa ny, t he r e w as no e vi de nc e di s put i ng t hi s e xp l ana t i o n. Ther e w as no c o nt e nt i o n o r e vi de nc e f r o m de fe nda nt t hat t he r e w as any im p r o p r ie tyo re r r o rin th e tr a d in gv a lu e s s h o w n in E x h ib it 2 7
. Case: 08-20418 Document: 00511004221 Page: 16 Date Filed: 01/14/2010N o. 08- 20418

17 The t r i alw as per fe c t l y fai rand t he pr o o f of t hi s ex hibi tw as ac c e pt e d a nd acceptabl e. N o preceden trequi res t h i s p an elru l i n g. I r egard i tas a m i suse of th e ru l es o f ev i d en ce a n d dissen t. Case: 08-20418 Document: 00511004221 Page: 17 Date Filed: 01/14/2010