Opinion ID: 166597
Heading Depth: 2
Heading Rank: 4

Heading: evidence of past bad acts

Text: 72 Next, Wenger argues that the district court improperly admitted evidence of past bad acts. In particular, he contests the admission into evidence of the following statement: In 1984 the Securities and Exchange Commission found that Penny Stock Newsletter, Inc. and Jerome M. Wenger willfully violated section 17(b) of the Securities Act of 1933. 73 We review the admission into evidence of past bad acts for abuse of discretion. United States v. Rackstraw, 7 F.3d 1476, 1478 (10th Cir.1993). Federal Rule of Evidence 404(b) states that evidence of past bad acts may not be admitted as character evidence, but may be admitted for other purposes. To determine whether evidence of past bad acts was properly admitted, we ask whether (1) the evidence was offered for a proper purpose; (2) the evidence was relevant; (3) the trial court determined under Fed.R.Evid. 403 that the probative value of the evidence was not substantially outweighed by its potential for unfair prejudice; and (4) the trial court gave the jury proper limiting instructions upon request. United States v. Hill, 60 F.3d 672, 676 (10th Cir.1995) (citing Huddleston v. United States, 485 U.S. 681, 108 S.Ct. 1496, 99 L.Ed.2d 771 (1988)). 74 The record makes clear that the contested statement was introduced for the purpose of rebutting Wenger's defense of good faith reliance on counsel. In addition, the contested statement was relevant to the question of whether Wenger had revealed all material facts to his counsel. Finally, the trial court gave the jury a limiting instruction he requested. Therefore, as Wenger concedes, the district court's ruling satisfied prongs (1), (2), and (4) of the Huddleston/Hill test. 75 Wenger nonetheless claims that the district court failed to satisfy prong (3) because it failed to determine whether the probative value of the evidence outweighed its potential for prejudice under Rule 403. We have firmly held that to satisfy prong (3) a district court need not make an explicit Rule 403 ruling, so long as the determination as to prejudice is supported by the record. United States v. Lazcano-Villalobos, 175 F.3d 838, 847 (10th Cir.1999) (Although explicit findings are clearly preferable, under the facts of this case we conclude the district court must have implicitly made a Rule 403 finding when it contemplated Mr. Lazcano-Villalobos' unfair prejudice and probative value argument.). In this case, the record shows that the government had to submit evidence of the SEC's earlier decision in order to rebut Wenger's contention that he had disclosed all relevant facts to his counsel. While the contested statement may have had a potential for prejudice, the record supports the view that its prejudice did not substantially outweigh its probative value. 76 Furthermore, the trial transcript reveals that the district court was aware of the potential for prejudice. Not only did the district court, in response to Wenger's objections, refuse to admit into evidence the entire 1984 consent decree, but, before Wenger's attorney even asked, the court offered to give a limiting instruction. It is clear the district court, in fact, considered the contested statement's potential for prejudice. Accordingly, we find no error. 77