Document: 484 U.S. 19 108 S.Ct. 316 98 L.Ed.2d 275 David CARPENTER, Kenneth P. Felis, and R. Foster Winans, Petitionersv.UNITED STATES. No. 86-422. Argued Oct. 7, 1987. Decided Nov. 16, Syllabus Petitioner Winans was coauthor of a Wall Street Journal investment advice column which, because its perceived quality integrity, had an impact on the market prices stocks it discussed. Although he familiar with Journal's rule that column's contents were confidential information prior to publication, entered into scheme petitioner Felis another stockbroker who, in exchange for advance from as timing column, bought sold based probable shared their profits Winans. On basis this scheme, convicted violations federal securities laws mail wire fraud statutes, 18 U.S.C. §§ 1341, 1343, which prohibit use mails or electronic transmissions execute "any artifice defraud, obtaining money property by means false fraudulent pretenses, representations, promises"; Carpenter aiding abetting. The Court Appeals affirmed. Held: 1. Insofar affirmed petitioners' convictions under laws, judgment below is equally divided Court. 24. 2. Petitioners' conspiracy trade within reach statutes. Pp. 25-28. (a) "property" right keeping making exclusive use, schedule Winans' columns, protected intangible nature cannot affect determination, since McNally v. United States, 483 350, 107 2875, 97 292 (1987), did not limit scope § 1341 protection tangible opposed rights, but merely distinguished rights unprotected honest impartial government. 25-27. (b) activities constituted defraud meaning It irrelevant petitioners might have interfered information, publicized deprived first public caused monetary loss, being sufficient has been important disclosing public. argument conduct violated workplace rules amount proscribed activity untenable, 1343 any deprive fraud, including appropriation one's own entrusted care another. Here, his fiduciary obligation protect employer's exploiting personal benefit, all while pretending perform duty safeguarding it. Furthermore, evidence strongly supports conclusion each acted required specific intent defraud. 27-28. (c) contention wires print send customers insufficient satisfy statutory requirement be used at issue rejected. Circulation only anticipated essential part there would no effect stock likelihood profiting leaked without such circulation. 28. 791 F.2d 1024 (CA2 1986), WHITE, J., delivered opinion unanimous holding number 2, above. Don D. Buchwald, New York City, petitioners. Sol. Gen. Charles Fried, Washington, D.C., respondent. Justice WHITE 1 Petitioners violating 10(b) Securities Exchange Act 1934, 48 Stat. 891, 15 78j(b),1 Rule 10b-5, 17 CFR 240.10b-5 (1987).2 States 612 F.Supp. 827 (SDNY 1985). They also found guilty 1341,3 1343,4 371.5 Carpenter, roommate, With minor exception, Second Circuit affirmed, (1986); we granted certiorari, 479 1016, 666, 93 718 (1986). 2 * In 1981, became reporter (the Journal) summer 1982 one two writers daily "Heard Street." That discussed selected groups stocks, giving positive negative about those taking "a point view respect reviews." F.Supp., 830. regularly interviewed corporate executives put together interesting perspectives highlighted upcoming but, least columns here, none contained inside "hold release" information. Id., 830, n. Because "Heard" potential affecting price examined. District concluded testimony presented trial "does market, difficult though may quantify particular case." 3 official policy practice Despite rule, familiar, October 1983 Peter Brant both connected Kidder Peabody brokerage firm give them column. This permitted conspirator, Clark, client Brant, buy sell market. Profits shared. conspirators agreed journalistic purity find articles altered further profit stock-trading scheme. 832, 834-835. Over 4-month period, brokers made prepublication trades given some 27 columns. net these $690,000. 4 November 1983, correlations between trading Clark accounts noted inquiries began. denied knowing anyone took steps conceal trades. Later, Commission began investigation. Questions met denials Journal. As investigation progressed, quarreled, March 29, 1984, went SEC revealed entire indictment bench followed. who pleaded plea agreement, witness Government. 5 found, agreed, knowingly breached confidentiality misappropriating regarding gained course employment understanding publication if were, report employer. underlay counts. charges, courts held deliberate breach concealment deceit victim Journal, buyer seller traded otherwise participant, nevertheless considered "in connection with" purchase sale statute rule. reasoned scheme's sole purpose contents. rejected submission, questions criminal liability could imposed 10b-5 "the newspaper alleged interest traded." 6 affirming convictions, ruled fraudulently misappropriated statutes revelation harmed well services nexus 1343. petition certiorari challenged conclusions. 7 evenly reason affirms For reasons follow, affirm convictions. II 8 assert statutes;6 event, they obtain "money property" necessary element crime our decision last Term (1987). We are unpersuaded either submission address latter first. 9 does "schemes citizens government," id., 355, S.Ct., 2879, "limited rights." 360, 2882. argue more than consideration outside 1341; nor law, urged, against mere injury reputation. case like McNally, however. employer, defrauded much contractual faithful service, too ethereal itself fall statute, "had origin desire individual supra, 359, 8, 2881, 8. object take business information—the column—and make less rights. 10 Both expressly referred right, F.2d, 1034-1035; 846, agree conclusion. Confidential long recognized property. See Ruckelshaus Monsanto Co., 467 986, 1001-1004, 104 2862, 2874, 81 815 (1984); Dirks SEC, 463 646, 653, 10, 103 3255, 3260, 77 911 (1983); Board Trade Chicago Christie Grain & Stock 198 236, 250-251, 25 637, 639-40, 49 L.Ed. 1031 (1905); cf. 552(b)(4). "Confidential acquired compiled corporation species court equity will through injunctive process other appropriate remedy." W. Fletcher, Cyclopedia Law Private Corporations 857.1, p. 260 (rev. ed. 1986) (footnote omitted). Grain, supra. observed before: 11 "[N]ews matter, however little susceptible ownership dominion absolute sense, trade, gathered cost enterprise, organization, skill, labor, money, distributed pay it, merchandise." International News Service Associated Press, 248 215, 39 68, 71, 63 211 (1918). 12 arguments interfere publicize see Reply Brief 6, miss point. generated business, decide how successfully contend Press requires competitor; exclusivity aspect most private matter. 13 accept revealing violation statute. Sections promises. words "to defraud" "common understanding" " 'wronging dishonest methods schemes,' 'usually signify deprivation something value trick, deceit, chicane overreaching.' U.S., 358, 2881 (quoting Hammerschmidt 265 182, 188, 44 511, 512, 68 968 (1924)). concept "fraud" includes act embezzlement, 'the goods another.' Grin Shine, 187 181, 189, 23 98, 102, 47 130 (1902). 14 undertaking reveal promise sham when passed along co-conspirators belonging pursuant ongoing share anticipation Snepp 444 507, 515, 11, 100 763, 768, 62 704 (1980) (per curiam), although grounded provisions written trust agreement prohibiting unapproved Government similar prohibitions common "even absence contract, employee obtained during employment." recognized: "It established, general proposition, person acquires special knowledge virtue relationship free exploit benefit must account principal derived therefrom." Diamond Oreamuno, 24 N.Y.2d 494, 497, 301 N.Y.S.2d 78, 80, N.E.2d 910, 912 (1969); Restatement (Second) Agency 388, Comment c, 396(c) (1958). trouble here provided elements offenses satisfied. intended kept property; declaration manual removed doubts score finding easier. continued employ appropriating fact, told editors twice leaks related 831, demonstrating viewed concerning played role loyal employee. Court's supported evidence. 847-850. 16 Lastly, reject using mediums issue. quite observing circulation Had available customers, Affirmed. Section provides: shall unlawful person, directly indirectly, instrumentality interstate commerce mails, facility national exchange— "(b) To employ, security registered so registered, manipulative deceptive device contrivance contravention regulations [Securities Exchange] prescribe investors." commerce, exchange, "(a) device, untrue statement material fact omit state order statements made, light circumstances misleading, "(c) engage act, practice, operates operate upon security." "Whoever, having devised intending devise promises, sell, dispose of, loan, alter, away, distribute, supply, furnish procure counterfeit spurious coin, obligation, security, article, anything represented intimated out executing attempting do, places post office authorized depository matter thing whatever sent Postal Service, takes receives therefrom, thing, causes according direction thereon, place directed whom addressed, fined $1,000 imprisoned five years, both." transmits transmitted wire, radio, television communication foreign writings, signs, signals, pictures, sounds artifice, 371 "If persons conspire commit offense agency thereof manner purpose, do conspiracy, $10,000 same language relevant part, accordingly apply analysis sets here.

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