IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 14-51012

UNITED STATES OF AMERICA, 

 Plaintiff - Appellee

v.

MICHAEL GLUK; MICHAEL BAKER, 

 Defendants - Appellants

Appeals from the United States District Court

for the Western District of Texas

ON PETITION FOR REHEARING

Before JOLLY and JONES, Circuit Judges, and MILLS, District Judge.*

E. GRADY JOLLY, Circuit Judge:

The petition for panel rehearing is GRANTED, the original panel opinion 

(presently available at 811 F.3d 738 (5th Cir. Jan. 25, 2016)) is hereby 

withdrawn, and this opinion is substituted therefor.1

Michael Baker and Michael Gluk appeal their convictions for securities 

fraud. Because we agree with their evidentiary challenges, we vacate their 

 

* District Judge for the Northern District of Mississippi, sitting by designation. 

1 This opinion discusses the hearsay and harmless error issues in more depth; the 

revisions are largely contained in Part II.A–II.C.

United States Court of Appeals

Fifth Circuit

FILED

August 4, 2016

Lyle W. Cayce

Clerk

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convictions and remand for a new trial.2

I.

Michael Baker and Michael Gluk were, respectively, the CEO and CFO 

of ArthroCare, a medical device company. Under their tenure (and, allegedly, 

with their knowledge) ArthroCare practiced “channel stuffing” with a related 

entity, DiscoCare.

“Channel stuffing” is a fraudulent scheme companies sometimes 

attempt, in an effort to smooth out uneven earnings—typically to meet Wall 

Street earnings expectations. Specifically, a company that anticipates missing

its earnings goals will agree to sell products to a coconspirator. The company 

will book those sales as revenue for the current quarter, increasing reported 

earnings. In the following quarter, the coconspirator returns the products, 

decreasing the company’s reported earnings in that quarter. Effectively, the

company fraudulently “borrows” earnings from the future quarter to meet 

earnings expectations in the present. Thus, in the second quarter, the 

company must have enough genuine revenue to make up for the “borrowed” 

earnings and to meet that quarter’s earnings expectations. If the company 

does not meet expectations in the second quarter, it might “borrow” ever-larger 

amounts of money from future quarters, until the amounts become so large 

that they can no longer be hidden and the fraud is revealed.

ArthroCare carried out exactly this fraud, with DiscoCare playing the 

role of coconspirator. Over several years, ArthroCare fraudulently “borrowed” 

around $26 million from DiscoCare. This “borrowing” occurred by directing 

DiscoCare to buy products from ArthroCare on credit, with the agreement that 

ArthroCare would be paid only when DiscoCare could sell those products. 

 

2 Because we reverse based on the evidentiary challenges, we do not reach the

defendants’ other challenges to their convictions. 

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Although this can be a legitimate sales strategy, it was fraudulent here 

because DiscoCare purchased medical devices that it knew it could not sell 

reasonably soon for the sole purpose of propping up ArthroCare’s quarterly 

earnings. This fraud was carried out under the day-to-day supervision of John 

Raffle, the Vice President of Strategic Business Units, and of David Applegate,

another DiscoCare executive. 

DiscoCare’s business model (apart from the accounting fraud) was 

potentially wrongful, though no charges were brought. DiscoCare provided a 

medical device for which most insurers refused reimbursement. To sell its 

device, DiscoCare reached agreements with plaintiffs’ attorneys in civil actions 

for personal injuries. These agreements resulted in the majority of DiscoCare's 

sales. Under this agreement, DiscoCare would treat clients of the attorneys. 

The plaintiffs’ attorneys would then cite the expense of their clients’ treatment 

as a reason for defendants to settle personal injury lawsuits. DiscoCare also 

allegedly illegally coached doctors on which billing codes to use, in an effort to 

increase insurance reimbursements. This practice allegedly went as far as 

instructing doctors to perform an unnecessary surgical incision to classify the 

treatment as a surgery. No charges were filed on any of this conduct. 

ArthroCare subsequently purchased DiscoCare for $25 million, a price 

that far exceeded its true value (DiscoCare had no employees at the time). 

During this purchase, the fraud began to unravel, with media reports alleging 

accounting improprieties. To reassure investors, Gluk and Baker made several 

false statements during a series of conference calls. As evidence mounted, the 

audit committee of ArthroCare’s board of directors commissioned an 

independent investigation by forensic accountants and the law firm Latham & 

Watkins. As a result of this investigation, the board determined that Raffle 

and Applegate had committed fraud and that Gluk and Baker had not 

adequately supervised them. The board restated earnings, resulting in a 

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significant drop in the value of ArthroCare stock. The board fired Raffle and 

Applegate for their roles in the fraud. The board also fired Gluk, determining 

that he had been remiss in not detecting the fraud earlier. Finally, the board

fired Baker, determining that he should have implemented better internal 

controls. 

The SEC investigated ArthroCare (both informally and formally) to 

determine the extent of the fraud. During this investigation, Raffle and 

Applegate exercised their Fifth Amendment right against self-incrimination to 

decline to answer questions. After its investigation, the SEC sued ArthroCare, 

Raffle, and Applegate for securities fraud; it did not sue Gluk or Baker. It did 

file a “clawback” complaint against Gluk and Baker; this complaint stated that 

the SEC “does not allege that Baker and Gluk participated in the wrongful 

conduct” but instead determined that Raffle and Applegate “intentionally 

withheld” information from Gluk and ArthroCare.

The government subsequently brought criminal charges, initially only 

against Raffle and Applegate. Raffle and Applegate pled guilty and agreed to 

testify against Gluk and Baker; the government then indicted Gluk and Baker 

for the channel stuffing. At trial, Raffle and Applegate testified that Gluk and 

Baker knew of the fraud; Gluk and Baker testified that they did not. The key 

question for the jury was whether to believe Gluk and Baker or to believe the 

government.

The district court made several significant evidentiary rulings 

challenged on appeal. First, the defendants sought to introduce the Latham 

report, the SEC’s clawback complaint against Baker and Gluk, and two memos 

regarding the SEC investigation that the SEC had prepared for the DOJ. As 

discussed in more detail below, these memos both summarized the SEC 

investigation. The 2010 SEC memo stated that “Raffle and Applegate . . .

misled [Gluk] about whether certain DiscoCare sales satisfied the company’s

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revenue recognition criteria. . . . Raffle also misled the company and its 

external auditor about the true [fraudulent] reason for certain product 

exchanges by DiscoCare and another distributor.” The 2011 memo expanded 

on the contents of the earlier memo and provided a somewhat more detailed 

summary of the investigation; this memo stated that Raffle and Applegate 

“orchestrated a scheme to materially misstate ArthroCare’s publicly reported 

revenue and earnings.”

According to Gluk and Baker, these documents would have corroborated

their claim that they did not know of the fraud. Specifically, the documents 

would have shown that independent, neutral investigators determined that 

Raffle and Applegate—and not Gluk and Baker—had carried out and 

concealed the fraud. Because no other independent testimony corroborated the 

defendant’s version of events, they argued that this evidence was essential to 

their defense. The district court disagreed, and excluded all these documents 

as more prejudicial than probative. 

The district court’s second important evidentiary ruling concerned 

evidence of uncharged misconduct. Specifically, the government sought to 

introduce testimony about the uncharged medical fraud that allegedly took 

place at DiscoCare. The district court allowed this testimony, over objection. 

The jury returned a guilty verdict. At sentencing, the court determined 

that Baker must forfeit his net proceeds (a different amount than the proceeds 

directly traceable to the fraud, see note 11 below) from selling ArthroCare stock 

during the period of the fraud, an amount equal to $22,165,030.78. This appeal 

followed.

II.

Gluk and Baker argue that the district court’s evidentiary rulings were 

incorrect in two ways: the rulings kept evidence out that should have been let 

in, and it let in evidence that should have been kept out. We agree on both 

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counts, and accordingly reverse the defendants’ convictions. 

We review the district court’s evidentiary rulings for abuse of discretion, 

subject to harmless error review. United States v. El-Mezain, 664 F.3d 467, 

494 (5th Cir. 2011). 

A.

We first consider the district court’s exclusion of the SEC documents.

First, were the documents hearsay? The parties agree that the SEC documents 

fit the definition of hearsay. See Fed. R. Evid. 801. The defendants, however, 

argue that the documents are nonetheless admissible for their truth because 

of the 803(8)(iii) hearsay exclusion. Rule 803(8) provides that “[a] record or 

statement of a public office [is admissible] if: (A) it sets out: . . . (iii) in a civil 

case or against the government in a criminal case, factual findings from a 

legally authorized investigation; and (B) the opponent does not show that the 

source of information or other circumstances indicate a lack of 

trustworthiness.” Fed. R. Evid. 803 (emphasis added).3 

The government responds that SEC documents did not set out “factual 

findings from a legally authorized investigation.” In support of this argument, 

the government cites Smith v. Isuzu Motors, Ltd., 137 F.3d 859 (5th Cir. 1998).

In Isuzu Motors, we carved out a narrow restriction to 803(8)(iii)4: we held that 

otherwise-qualifying agency reports are not “factual findings from a legally 

authorized investigation” if they “embody the positions and opinions of 

individual staff members [of an agency], which the agency ultimately declined 

to accept.” Id. at 862. Thus, under Isuzu Motors, when an agency disavows 

 

3 If the documents contain factual findings that qualify for 803(8), they are not 

rendered “inadmissible merely because [the documents] state a conclusion or opinion. As 

long as the conclusion is based on a factual investigation and satisfies the Rule’s 

trustworthiness requirement, it should be admissible along with other portions of the report.” 

Beech Aircraft Corp. v. Rainey, 488 U.S. 153, 170 (1988). 4 At the time Isuzu Motors was decided, the current 803(8)(iii) was 803(8)(C). 

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(“declines to accept”) a report prepared by a staff member, that report does not 

qualify for the 803(8)(iii) exclusion. Conversely, if the agency takes no action, 

then a report prepared by a staff member in the ordinary course of duty and 

circulated outside the agency is exactly the sort of “factual findings from a 

legally authorized investigation” that 803(8)(iii) is designed to exclude from the 

prohibition on hearsay. 

Further, the facts of Isuzu Motors shed light on what it means for an 

agency to “decline to accept” the findings in a document. In Isuzu Motors, a 

member of Congress “asked [the National Highway Traffic Safety 

Administration] to establish stability standards for certain types of passenger 

vehicles.” Id. at 862. In response to that request, NHTSA staff members 

prepared three initial memos that endorsed the Congressman’s position. After 

further consideration, however, “[t]he NHTSA ultimately rejected the . . . 

petition.” Id.

We held that this subsequent rejection established that the NHTSA had

“declined to accept” the findings in the memos and thus that the memos were 

not “factual findings” that could be ascribed to the agency. Id. Thus, Isuzu 

Motors applies where the agency has taken some affirmative action to disavow 

the findings contained in a document—such as issuing a subsequent 

determination rejecting the findings of the earlier document. 

Turning to the facts of this case, the SEC documents are covered by rule 

803(8)—and are therefore admissible for the truth of their contents—unless 

record evidence shows that the SEC “declined to accept” the positions in those 

documents or otherwise disavowed the findings in any way. 

We begin with the 2010 SEC memo.5 The heading of this memo states

 

5 This memo provides an overview of the SEC investigation and states that “Raffle 

and Applegate also mislead the company’s CFO [i.e., Gluk] about whether certain DiscoCare 

sales satisfied the company’s revenue recognition criteria. . . . Raffle and Applegate 

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that it is from “SEC” and to “Main Justice,” a synonym for the DOJ. Based on 

this heading, the memo appears to be an official communication from the SEC

to the DOJ. Thus, it seems to be a “factual finding” of the SEC and therefore 

to be admissible under rule 803(8)(iii).

Nevertheless, the government argues that the report is not admissible 

under 803(8)(iii), as interpreted by Isuzu Motors. According to the government, 

the 2010 memo was not “approved by the Commission” at its highest levels, 

and thereby is not a “factual finding” by the SEC. This argument, however, 

gets the Isuzu Motors analysis precisely backwards. Isuzu Motors does not 

allow agency reports only when those reports are endorsed at the highest level. 

Instead, Isuzu Motors only forbids agency reports when they have been 

disavowed in some way. Here, no evidence suggests that the SEC disavowed 

the contents of the 2010 memo; consequently, that memo represents “factual 

findings from a legally authorized investigation” and is admissible under rule 

803(8)(iii). 

The same analysis applies to the second memo from the SEC to the DOJ 

that Gluk and Baker seek to introduce.6 Unlike the first memo, the heading of 

the second memo states that the memo is from an individual—SEC attorney 

Jim Etri—rather than from the SEC as an entity. Etri, however, was the 

author of both memos and no evidence suggests that the SEC repudiated the 

second memo’s findings or that they were made outside of Etri’s capacity as an 

SEC attorney. 

 

intentionally withheld this information from ArthroCare’s CFO to prevent the revenue from 

being reversed. . . . Raffle also mislead the company and its external auditor about the true 

[fraudulent] reason for certain product exchanges by DiscoCare and another distributor.”

6 The second memo provides a slightly longer summary of the SEC enforcement. It 

“summarizes the misdeeds of John Raffle and David Applegate” and explains how “[t]hey 

orchestrated a scheme to materially misstate ArthroCare’s publicly reported revenue and 

earnings.” It also makes multiple references to Raffle’s “lies” to “ArthroCare accounting 

staff.” 

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Finally, the SEC’s clawback complaint unambiguously represents an 

official action of the SEC. In the case of all three SEC documents, they were 

transmitted or filed by an SEC attorney to others outside the SEC. When an 

agency professional transmits a document to others outside the agency, that 

document is presumptively a factual finding of the agency. That presumption 

could be easily rebutted by evidence that others in the agency, such as 

superiors, had disavowed the contents of the document or otherwise “declined 

to accept” those contents. The government has not presented any evidence that 

any SEC employee “declined to accept” the contents of the SEC memos or the 

SEC clawback complaint.

 Accordingly, we hold that all three SEC documents are admissible for 

the truth of their contents under rule 803(8)(iii).7

B.

We thus turn to the question under Rule 403 of whether the district court 

abused its discretion in determining that that prejudicial effect of the SEC 

documents substantially outweighed their probative value. 

The government argues that the reports would have improperly 

influenced and thus prejudiced the jury in performing its duties because the

SEC examined no more information than the jury. According to the 

government, the SEC was essentially a fact-finding body, no more capable than 

the jury of determining whether Gluk and Baker had committed accounting 

fraud. The government worried that the “jury may have [incorrectly] believed 

that the SEC [was] better positioned to make factual findings”; that is to say 

that the jury may have been intimidated into blindly adopting the SEC’s 

 

7 This hearsay exception does not apply to the Latham report; thus, that report is 

hearsay. Additionally, we express no opinion regarding whether some statements contained 

within the SEC documents could themselves be hearsay. If so, this second level of hearsay 

would be inadmissible—unless, of course, some other exception or exclusion applied to the 

hearsay within hearsay. 

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conclusions when the jury’s fair judgment should be the sole determinant of 

guilt or innocence. But the jury is perfectly capable of weighing the evidence 

contained in the SEC documents against other evidence to the contrary and 

making an independent decision. Weighing evidence against other evidence is 

a core function of the jury, and we find no reason to be concerned that a 

properly instructed jury would improperly defer to the SEC’s findings. 

Moreover, Gluk and Baker argue that the SEC documents were highly 

probative precisely because the SEC was better positioned to make factual 

findings and that professional findings would have been highly probative of the 

defendants’ culpability. SEC staff are experts in understanding and 

evaluating financial fraud. Administrative findings, the defendants assert, are 

admissible precisely because administrative expertise might aid the jury. The 

defendants’ arguments may be an overstatement, but we have touched on this 

issue before, in Smith v. Universal Services, Inc., 454 F.2d 154 (5th Cir. 1972). 

In Smith, we held that EEOC reports, though not binding, are 

nevertheless admissible at trial. In effect, Smith held that an EEOC report 

can assist the jury in the same way an expert’s testimony would. “The fact 

that an [EEOC] investigator, trained and experienced in the area of 

discriminatory practices and the various methods by which they can be 

secreted, has found that it is likely that such an unlawful practice has occurred, 

is highly probative of the ultimate issue involved in such cases.” Id. at 157 

(emphasis added).8 Gluk and Baker point out numerous cases that have 

followed this same reasoning, both for the EEOC and other agencies. E.g.,

Hodge v. Seiler, 558 F.2d 284, 288 (5th Cir. 1977) (admitting a HUD report). 

 

8 The government, citing out-of-circuit law, argues that the expertise of the agency 

preparing a report does not increase the probative value of a report prepared by that agency. 

See Coleman v. Home Depot, Inc., 306 F.3d 1333, 1345 (3d Cir. 2002). This argument flatly

contradicts Smith and we reject it. 

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The government contends that these cases should be limited to the 

EEOC context and should not apply to SEC investigations. The government 

points out that, as this case demonstrates, financial-fraud cases can turn on 

credibility determinations—which is indeed the sole providence of the jury. 

But employment discrimination cases are equally likely to turn on credibility 

determinations; thus, the relevance of witness credibility provides no more 

reason to exclude SEC documents than to exclude EEOC reports. Moreover, 

investigations of employment discrimination and investigations of accounting 

fraud both typically involve complex legal intricacies where expert 

administrative guidance may assist the jury in weighing the evidence. In 

short, we see no relevant distinction between the SEC memos and an EEOC 

report; both are “highly probative.” Smith, 454 F.2d at 157.

The government presents a slightly different argument regarding the

SEC clawback complaint. The government argues that “charging decisions”

are not highly probative because “many factors unrelated to guilt may 

influence those decisions and their admission therefore risks misleading the 

jury and confusing the issues.” United States v. Reed, 641 F.3d 992, 993 (8th 

Cir. 2011). If Gluk and Baker sought to admit the mere fact that the SEC had 

brought a clawback complaint, then the government’s argument would be 

correct—the simple fact that the SEC brought a clawback complaint instead of 

some other charge, is of very limited probative value. 

In fact, however, Gluk and Baker do not seek to admit the charging 

decision, as the defendant in Reed attempted to do. Rather, Gluk and Baker 

want to admit the clawback complaint, which contains factual statements 

helpful to their defense. These statements have the same probative value as 

the similar statements in the memos. 9

 

9 Nor do we believe that discussion of the complaint would necessitate undue 

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We accordingly hold that the SEC documents are adequately probative 

in helping the jury weigh the credibility issues presented in this case. The 

district court enjoys great discretion under rule 403 to exclude evidence. See 

United States v. O'Keefe, 426 F.3d 274, 280 (5th Cir. 2005). Nonetheless, this 

discretion is not unlimited. Viewed correctly, the probative value of the SEC 

report exceeded any undue prejudicial effect. The jury was entitled to know 

that the SEC conducted an investigation, and concluded that Raffle and 

Applegate “mislead” the company, its accounting staff, and the CFO (Gluk) by 

“withholding information” and “l[ying]”; the jury should also know that, after 

conducting this investigation, the SEC chose to “not allege that Baker and 

Gluk participated in the wrongful conduct” that occurred at ArthroCare. Of 

course, the jury was also entitled to hear that the government conducted an 

independent investigation and reached a different conclusion after securing 

the cooperation of Raffle and Applegate. Armed with all relevant information, 

the jury would then appropriately weigh the evidence and decide what to 

believe. Accordingly, we hold that the district court abused its discretion in 

determining that the SEC statements should be excluded under rule 403.10

 

digressions into the details of the Sarbanes-Oxley clawback framework. The government is 

free to point out that, to be entitled to a clawback, the SEC was not required to allege that 

the defendants had any role in the fraud. The defendants, in turn, are free to point out that 

the SEC went out of its way to state that it did “not allege that Baker and Gluk participated 

in the wrongful conduct.” The jury can then draw whatever conclusions from these 

arguments that it thinks best. 

10 Gluk and Baker also argue that the district court abused its discretion by excluding 

the Latham report. We disagree. As noted above, the Latham report does not qualify for a 

hearsay exception and therefore is admissible only for impeachment purposes. The limited 

admissibility of the Latham report significantly diminishes the probative value of the Latham 

report. Further, as the government points out, Raffle and Applegate testified at length about 

the Latham investigation, so the additional probative value of admitting the report is limited. 

Nevertheless, as Gluk and Baker note, the Latham report had significant impeachment 

value. Given this impeachment value, we are not prepared to hold that admitting it would 

have been erroneous. At the same time, excluding it was not an abuse of the district court’s 

considerable discretion. 

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C.

The government next argues that, if the district court did err in 

excluding the SEC statement, the error was harmless. See United States v. ElMezain, 664 F.3d 467, 525 (5th Cir. 2011). The government points out that the 

SEC documents barely mention Gluk and Baker. Yet this argument actually 

shows the harm of excluding the documents: The memos “provide[d] a highlevel overview of the underlying facts” surrounding ArthroCare’s fraud. That 

a description of the ArthroCare fraud amounts to a chronicle of “the misdeed 

of John Raffle and David Applegate” is particularly relevant, as is the claim 

that Raffle and Applegate “orchestrated [the] scheme” and that “Baker and 

Gluk [were not alleged to have] participated in the wrongful conduct.” The 

very absence of Gluk and Baker from these documents actually supports the 

story they presented to the jury: that they did not know about Raffle and 

Applegate’s fraud. We are also unconvinced by the government’s argument 

that the error was harmless because the jury had access to all the evidence 

that formed the basis for the SEC report. That the SEC, a largely neutral 

investigator, had concluded that Raffle and Applegate were at the center of the 

fraud—and, indeed, had repeatedly lied to others at ArthroCare—could 

appropriately assist the jury in weighing the evidence presented at trial. To 

acknowledge a reasonable possibility, the jury could have ultimately accepted 

the SEC reports as casting a reasonable doubt on the government’s case. That 

is not harmless. Accordingly, we hold that the district court’s error in 

excluding the SEC documents was not harmless and we reverse and remand 

based on these errors. 

D.

Finally, Gluk and Baker argue that the district court erred by admitting 

evidence of uncharged fraud that purportedly took place at DiscoCare. Baker 

argues that:

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The [government’s] strategy, from evidence to argument, was 

clear. The government recognized an obvious truth: accounting 

fraud is bland. A straightforward attempt to prove an accounting 

fraud case would be difficult, both because the rules of accounting 

contain ample gray area and also because jurors might well be too 

bored to care. In order to convict, jurors need to be outraged, and 

few jurors are so moved by outsized accounts receivable and 

improper revenue recognition. In order to spark a sense of outrage, 

the prosecution went outside the charges proper. It went to the 

DiscoCare fraud and its lurid details of needless incisions 

performed at the behest of Florida ambulance chasers. 

The defendants argue that this evidence was impermissible character evidence 

and, in any event, was more prejudicial than probative. This evidence of 

uncharged misconduct arguably creates the inference that Gluk and Baker 

were bad people involved in shady operations and thus were the sort of people 

who might have tolerated accounting fraud. The defendants strenuously 

contend that using this type of evidence to demonstrate the character of the 

defendant is impermissible under Federal Rule of Evidence 404. 

The government, however, dismisses this argument, saying that 

activities at DiscoCare were intrinsic to the charges of wire fraud and were 

highly relevant. The government further argues that details about the 

activities at DiscoCare explain why Gluk and Baker would make misleading 

statements to investors (i.e., to hide those salacious details). Moreover, 

evidence that shows how involved Gluk and Baker were with the DiscoCare 

model demonstrates that they were involved in day-to-day operations of 

DiscoCare in its relationship with ArthroCare; this involvement is relevant to 

the credibility of their claim to have known nothing about Raffle’s and 

Applegate’s fraud. 

While at least some evidence of the DiscoCare conduct is undeniably 

relevant to ArthroCare’s accounting fraud, the relevance of some limited 

evidence does not license the government to introduce the magnitude of 

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testimony it elicited; nor does that limited relevance allow the government to 

emphasize the DiscoCare fraud, not chargeable to the defendants, in jury 

arguments. Allowing such breadth of testimony relating to salacious goingson at DiscoCare was error. 

We believe that the district court could have done more to police the line 

between proper and improper evidence; it could have been more careful to 

prevent the government from dwelling on the salacious details of DiscoCare’s 

business practices that could not be charged to the defendants. Because we 

reverse on other grounds, we need not determine whether this error 

independently justifies reversal or, conversely, whether it would have been 

harmless error in the absence of the reversible error we previously have 

identified. 

III. 

Accordingly, for the reasons stated, we VACATE Baker and Gluk’s 

convictions, and REMAND for a new trial.11

VACATED and REMANDED.

 

11 Because we reverse the convictions, we do not reach Baker’s challenge to the 

forfeiture calculation. We note, however, that forfeiture is not a fine (despite being subject to 

the same Eighth Amendment limits). See United States v. Bajakajian, 524 U.S. 321, 328 

(1998). As we read the relevant forfeiture statutes, they exist to require defendants to give 

up the proceeds of their crimes, not to punish them for those crimes. See United States v. 

Hatfield, 795 F. Supp. 2d 219 (E.D.N.Y. 2011). Requiring forfeiture of the entire value of

stock sold would require forfeiting compensation, even when that compensation is not 

traceable to fraud. 

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