Opinion ID: 793659
Heading Depth: 3
Heading Rank: 1

Heading: rim

Text: 117 In October 2000, RIM completed a $612 million public offering of common stock, which was underwritten by a syndicate. . . that included Merrill Lynch & Co. . . . and . . . CSFB. J.A. 1090. In a November 2, 2000, email to RIM's CEO, Quattrone claimed that RIM's CEO had promised him that RIM would guarantee CSFB twenty-five percent of all underwriting fees generated by the syndicate. J.A. 1093. Because CSFB's fees amounted only to about 15.7% of the fees, Quattrone sought the difference necessary to reach a twenty-five percent fee, $2.2 million above what had been paid. J.A. 1093. While RIM initially resisted making the payment to the Tech Group, RIM eventually paid it two-million dollars. J.A. 1094. 118 During the presentation of Quattrone's case, the defense introduced a series of emails spanning fifty minutes that were sent by Quattrone on December 5, 2000, around the time of the Endorsement Email. J.A. 420-23 (Tr. 1880-92). The purpose of the emails was to establish that prior to, during, and after sending the Endorsement Email, Quattrone was besieged with a constant stream of matters while attempting to get home for dinner with his family. See J.A. 421 (Tr. 1882-83). Defense counsel argued that the exhibits provided the most direct evidence of Quattrone's state of mind at the time he sent the Endorsement Email at 6:28 p.m. The RIM email was sent by Quattrone immediately after the Endorsement Email, asking what do we need to do to collect our 2mm? J.A. 768. Defense counsel argued to the trial court that the emails showed his mind going boom, boom, boom, boom, boom, right around the time that ends up with this e-mail that the government contends is a crime. J.A. 421 (Tr. 1882). 119 Thereafter, the government alerted the court and counsel that it intended to cross-examine Quattrone regarding the substance of Quattrone's understanding of CSFB's fee agreement with RIM. J.A. 493-95 (Tr. 2168-2175). The government argued that inquiring into the facts underlying the RIM fee collection would establish that Quattrone was not simply dashing off emails in attempt to get home without thinking. It contended that the RIM transaction involve[d] what arguably [was] misconduct. J.A. 494 (Tr. 2171). During cross-examination, the government questioned Quattrone about the basis for seeking the two-million dollar fee. In the course of doing so, the government asked damaging questions intimating that perhaps Quattrone had run afoul of the securities laws because the compensation was not disclosed in RIM's SEC filings. See J.A. 496-97 (Tr. 2179-82) (And you know that when there's secret undisclosed compensation, that's a violation of the securities laws, right?). 120 We agree with the government that the inquiry into RIM was relevant both to impeaching Quattrone's credibility and to establishing Quattrone's state of mind at the time he sent the Endorsement Email. Quattrone's theory of the case focused in part on his contention that he was frantically attempting to leave work in order to meet family obligations. Consistent with this contention, the defense introduced the series of emails sent by Quattrone immediately before he left, including both the Endorsement Email and the email referring to RIM. The government's questioning regarding whether the RIM collection matter was in fact ordinary could add to the body of circumstantial evidence establishing Quattrone's wrongful intent and might discredit an important aspect of the defense's theory of the case. Thus, the questioning satisfied the threshold relevancy requirement of Rule 401. 31 121 But our inquiry does not end here. Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury . . . . FED. R. EVID. 403. 32 The evidence regarding RIM was probative of whether Quattrone was simply clearing his desk to get home early from work or, instead, had been contemplating significant, serious issues at almost the same time when he sent the Endorsement Email. Equally important, the line of inferences flowing from the RIM email contradicted part of the defense's theory of the case and the characterization by Quattrone that the email was about a simple collection matter. Thus, there was significant probative value to the email. 122 However, the manner of questioning by the government gave rise to the potential for unfair prejudice to Quattrone. 33 We have had occasion to discuss the meaning of unfair prejudice as used in Rule 403: 123 All evidence introduced against a defendant, if material to an issue in the case, tends to prove guilt, but is not necessarily prejudicial in any sense that matters to the rules of evidence. See United States v. Briggs, 457 F.2d 908, 911 [(2d Cir.1972)] . . . . Evidence is prejudicial only when it tends to have some adverse effect upon a defendant beyond tending to prove the fact or issue that justified its admission into evidence. See Advisory Committee Note to Rule 403; S. SALTZBURG AND K. REDDEN, FEDERAL RULES OF EVIDENCE MANUAL 43 (2d ed. 1978 Supp.). The prejudicial effect may be created by the tendency of the evidence to prove some adverse fact not properly in issue or unfairly to excite emotions against the defendant. . . . When material evidence has an additional prejudicial effect, Rule 403 requires the trial court to make a conscientious assessment of whether the probative value of the evidence on a disputed issue in the case is substantially outweighed by the prejudicial tendency of the evidence to have some other adverse effect upon the defendant. 124 United States v. Figueroa, 618 F.2d 934, 943 (2d Cir.1980). That is to say, the prejudice undercutting a particular piece of evidence does not arise out of the rationale that justified its admission into evidence. Instead, the prejudice must be unfair in the sense that it could unduly inflame the passion of the jury, confuse the issues before the jury, or inappropriately lead the jury to convict on the basis of conduct not at issue in the trial. See CHRISTOPHER B. MUELLER & LAIRD C. KIRKPATRICK, FEDERAL EVIDENCE § 94, at 486-498 (2d ed.1994). 125 Establishing that Quattrone contemplated significant, important issues around the time that he sent the Endorsement Email provided the justification for the government's RIM inquiry. The evidence on that point also contradicted Quattrone's testimony to the extent that he implied that the RIM fee dispute was a simple matter. Appellee Br. 93-94. However, even a cursory reading of the record establishes that the government's questions quickly focused on a suggestion that Quattrone had failed to disclose information required by SEC regulations. See J.A. 496-97 (Tr. 2179-82), supra. Despite the government's representations at oral argument, the unavoidable consequence of this inappropriate suggestion was that Quattrone had likely run afoul of an SEC mandate. Moreover, the SEC investigation was a critical focal point of the government's charges. Simply put, the line of questioning went too far. Once the government sought to make the RIM matter a bad act involving a violation of SEC regulations, neither established nor charged, it created the prospect that the jury might view the RIM evidence as further proof of Quattrone's desire to obstruct the SEC in the pursuit of its regulatory responsibilities. While it may be the case that the RIM email reflects other culpable acts, those acts were not part of the charges brought against Quattrone.