Court Opinion

ID: 9498484
Source: CourtListenerOpinion
Date Created: 2023-08-05 17:18:42.715228+00
Date Added: 2024-06-11T17:58:51.445249
License: Public Domain

RAGGI, Circuit Judge,
dissenting.
On this appeal from a judgment of acquittal after a jury verdict of guilty, the government challenges the district court’s construction of “willfulness” for purposes of Securities and Exchange Commission (“SEC”) Rule 14e-3(a). See 17 C.F.R. § 240.14e.3(a). The district court concluded that willfulness required the government to prove that the defendant, John J. Cassese, knew that the nonpublic information on which he traded “related to, or most likely related to, a tender offer,” which the government failed to do. United States v. Cassese, 290 F.Supp.2d 443, 450, 452 (S.D.N.Y.2003). The majority finds it unnecessary to reach this issue, concluding that, even if willfulness only requires proof that Cassese generally understood the unlawfulness of his actions, the government failed to carry its burden. Because I do not agree either with the majority’s sufficiency conclusion or with the district court’s construction of willfulness as it applies to Rule 14e-3(a), I respectfully dissent.
1. The Majority’s Conclusion that the Government Failed to Prove Willfulness
a. Sufficiency Review
“Willfulness” is the element that converts a civil violation of Rule 14e-3(a) into *104a felony crime. See 15 U.S.C. § 78ff(a) (“Any person who willfully violates any provision of this chapter ..., or any rule or regulation thereunder the violation of which was made unlawful ... shall upon conviction be fined not more than $5,000,000, or imprisoned not more than 20 years, or both.”). “As a general matter, when used in the criminal context, a ‘willful’ act is one undertaken with a ‘bad purpose.’ In other words, to establish a ‘willful’ violation of a statute, ‘the Government must prove that the defendant acted with knowledge that his conduct was unlawful.’ ” Bryan v. United States, 524 U.S. 184, 191-92, 118 S.Ct. 1939, 141 L.Ed.2d 197 (1998) (quoting Ratzlaf v. United States, 510 U.S. 135, 137, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994)).
In evaluating the sufficiency of the evidence of Cassese’s willfulness under this standard, the court employs the familiar test articulated in Jackson v. Virginia, which asks whether “any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt” on the evidence adduced. 443 U.S. 307, 319, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979) (emphasis in original). If the answer is yes, the jury verdict of guilty cannot be set aside. See id. This standard of review draws no distinction between direct and circumstantial evidence. Indeed, the law recognizes that a guilty verdict can be based entirely on circumstantial evidence, see United States v. MacPherson, 424 F.3d 183 (2d Cir. Sept. 13, 2005); United States v. Morgan, 385 F.3d 196, 204 (2d Cir.2004), and that elements going to the operation of a defendant’s mind, such as willfulness, can often be proved only through circumstantial evidence, see United States v. Salameh, 152 F.3d 88, 143 (2d Cir.1998); United States v. Nersesian, 824 F.2d 1294, 1314 (2d Cir.1987); see also United States v. Crowley, 318 F.3d 401, 409 (2d Cir.2003) (recognizing mens rea issues as “especially suited for resolution by a trial jury”).
Moreover, a reviewing court must examine the evidence in the light most favorable to the government and credit every reasonable inference that the jury could have drawn in its favor. See, e.g., United States v. Walker, 191 F.3d 326, 333 (2d Cir.1999). The fact that inferences favorable to the defense could also be drawn from the evidence is of no import because “the task of choosing among competing inferences is for the jury, not a reviewing court.” United States v. Salmonese, 352 F.3d 608, 618 (2d Cir.2003) (internal quotation marks omitted); see United States v. Jackson, 335 F.3d 170, 180 (2d Cir.2003) (noting that court may not substitute its own judgment for that of the jury in evaluating the weight of the evidence and the reasonable inferences to be drawn therefrom). To enter a judgment of acquittal, a court must conclude that the evidence, viewed as a whole and in the light most favorable to the government “is nonexistent or so meager that no reasonable jury could find guilt beyond a reasonable doubt.” United States v. Guadagna, 183 F.3d 122, 130 (2d Cir.1999) (internal quotation marks omitted).
In concluding that this is such a case, the majority relies, in part, on United States v. Glenn, which states that, when evidence “gives ‘equal or nearly equal circumstantial support to a theory of guilty and a theory of innocence,’ ... ‘a reasonable jury must necessarily entertain a reasonable doubt.’ ” 312 F.3d 58, 70 (2d Cir.2002) (quoting United States v. Lopez, 74 F.3d 575, 577 (5th Cir.1996)). Glenn did not, however, abrogate the holding in United States v. Autuori that, when “either of the two results, a reasonable doubt or no reasonable doubt, is fairly possible!] a reviewing court] must let the jury decide the matter.” 212 F.3d 105, 114 (2d Cir.*1052000); accord United States v. MacPherson, 424 F.3d at 190 (quoting Autuori); United States v. Morgan, 385 F.3d at 204 (same); United States v. Espaillet, 380 F.3d 713, 718 (2d Cir.2004) (same).
In any event, as Glenn makes clear, the rule it articulates comes into play only at the end of the review process, that is, after a court has examined the totality of the evidence and drawn all permissible inferences therefrom in favor of the government. See United States v. Glenn, 312 F.3d at 70. Glenn does not hold that a reviewing court may examine discrete evidence and reject or discount permissible inferences favorable to the government because inferences favorable to the defense could “equally or nearly equally” be drawn from that evidence. Cf. United States v. Salmonese, 352 F.3d at 618; see also United States v. Jackson 335 F.3d at 180. Thus, unless a court determines that no rational jury could draw an inference favorable to the government from particular evidence, the court must assume that such an inference was drawn. And if the totality of the evidence, including all permissible inferences favorable to the government, would allow a rational jury to find the elements of the charged crime proved beyond a reasonable doubt, the court cannot set aside a guilty verdict.
b. The Trial Evidence of Willfulness
Unlike my colleagues in the majority, I conclude that the totality of the evidence would permit a rational jury to find willfulness in this case beyond a reasonable doubt.
(1) Cassese’s Background
The evidence indicated that Cassese was a sophisticated investor, who traded regularly through seven active brokerage accounts. More important, he was the chief executive officer of a publicly traded corporation, Computer Horizons Corporation. From these background facts, a rational jury could reasonably infer that Cassese possessed, at least, a general awareness that trading on nonpublic information, while not absolutely proscribed, is, nevertheless, strictly regulated.1 See United States v. Peltz, 433 F.2d 48, 52 (2d Cir.1970) (noting SEC’s zealous policing of insider trading); see also United States v. Dixon, 536 F.2d 1388, 1395 (2d Cir.1976) (recognizing that chief executive of a publicly traded corporation can be presumed to know that public filings are highly regulated); United States v. Simon, 85 F.3d 906, 911 (2d Cir.1996) (noting that licensed stockbroker could be presumed to be familiar with currency filing requirements).
(2) The Confidentiality Agreement Warning
Further, the evidence showed that Cass-ese was specifically warned that trading on nonpublic information relating to a corporate acquisition was unlawful. On May 4, 1999, only six weeks before the challenged purchases, Compuware sent Cassese a Confidentiality Agreement along with a Letter of Intent proposing to acquire Computer Horizons. The Confidentiality Agreement stated: “[T]he United States securities laws prohibit any person in possession of material non-public information about a company from purchasing or selling securities of such company.” Confidentiality Agreement at 3. This warning is extraordinarily broad, reaching beyond the parties’ specific negotiations and even beyond the trading restrictions of Rules 10b-5 and 14e-3(a). A jury could reasonably *106infer from Cassese’s receipt of this warning that his subsequent reliance on nonpublic information in purchasing DPRC stock was willful, that is, done with an awareness that his actions were unlawful under the securities laws.
The majority concludes otherwise because it finds “no evidence in the record” that could support an inference that Cass-ese read the Confidentiality Agreement. I cannot agree. Whether a jury can infer that a person has read or is familiar with the contents of a document depends on the totality of the circumstances. See United States v. Brodie, 408 F.3d 123, 156-57 (3d Cir.2005) (concluding that jury could reasonably infer defendant’s familiarity with contents of a memorandum that noted, on its face, that he had been sent a copy); see generally United States v. Soto, 47 F.3d 546, 550 (2d Cir.1995) (recognizing that totality of circumstances must be considered in determining permissible inferences).
In this case, the Confidentiality Agreement and the accompanying Letter of Intent were sent directly to Cassese, and his receipt is undisputed. Moreover, the documents were not unsolicited junk mail or routine corporate memoranda that a busy chief executive might ignore. Rather, the transmittals related to an important business matter — the acquisition of Computer Horizons — in which Cassese had already been playing an active part and in which he had a significant personal interest.2 Further, there was direct evidence that Cassese had read the accompanying Letter of Intent: Barry Goldsmith testified that Cassese discussed its contents with him the day after its receipt. Trial Tr. at 186-87. From the totality of the circumstances, a rational jury could reasonably conclude that Cassese had, in fact, reviewed the Confidentiality Agreement, such that, when he made the charged DPRC purchases, he did so understanding that it was unlawful to trade on nonpublic acquisition information.
(3) The Effort to Undo the DPRC Trades
While I think Cassese’s receipt of the Confidentiality Agreement warning would, by itself, permit a rational jury to find willfulness, further evidentiary support was provided by Cassese’s subsequent attempt to undo his DPRC trades despite their obvious profitability.3 The majority concludes that this evidence supports, at most, an inference that Cassese was aware of the unlawfulness of his trades at the time he sought to undo them, not at the time he made the initial purchases. I must disagree.
The majority’s analysis relies on cases holding that circumstantial evidence of consciousness of guilt — notably false exculpatory statements and flight — cannot alone support guilty verdicts. There must be some further evidence adduced indicating the defendant’s commission of the charged criminal acts. See United States v. Glenn, 312 F.3d at 69; United States v. Scheibel, 870 F.2d 818, 822 (2d Cir.1989); United States v. Johnson, 513 F.2d 819, 824 (2d Cir.1975). True enough. But these cases do not hold that, if such actus reus evidence is adduced, there is some temporal limit on the jury’s consideration of consciousness-of-guilt evidence to establish mens rea. Indeed, if flight or false exculpatory statements were indicative only of a *107defendant’s knowledge and intent at the time of those actions, the evidence would be irrelevant to the charged crime and properly excluded. Instead, the law admits consciousness-of-guilt evidence precisely because a jury may properly infer therefrom that the defendant believes himself to be guilty of the charged crime, which constitutes some evidence that he is, in fact, guilty. See 1 Leonard B. Sand, et ah, Modern Federal Jury Instructions: Criminal, Instructions 6-9 (flight), 6-11 (false exculpatory statements) (2002). So in this case, in which other evidence plainly established that Cassese had placed the charged DPRC stock purchases, a rational jury could reasonably infer from his effort to undo those trades that he believed that he was guilty of the charged Rule 14e-3(a) crime, that is, that he believed that, at the time he placed the trades, he did so in willful violation of federal securities laws. See United States v. Gordon, 987 F.2d 902, 906-07 (2d Cir.1993) (holding that defendant’s knowledge of and intent to participate in a criminal conspiracy may be established through circumstantial evidence, “including] acts that exhibit a consciousness of guilt”); see also United States v. Perez, 387 F.3d 201, 209 (2d Cir.2004) (recognizing that defendant’s attempt to persuade a witness to make false exculpatory statements is probative of guilty knowledge and intent).
(4) The Admissions to Goldsmith
Still further proof of Cassese’s willfulness was provided by Barry Goldsmith’s trial testimony. It is apparent, even on a cold record, that Goldsmith was a reluctant witness. Nevertheless, he testified that, after he alerted Cassese to the appearance of his DPRC trades in letter from the National Association of Securities Dealers, Cassese acknowledged making a “stupid mistake” in purchasing those shares. Trial Tr. at 207-08. Goldsmith also testified that, from the context of this conversation, he had understood Cassese to mean “[t]hat he bought stock in a company that he should not have done.” Id. at 255; see Fed.R.Evid. 701 (permitting lay opinion testimony); see also United States v. Garcia, 413 F.3d 201, 212 (2005) (observing that lay opinion testimony assists the jury by affording it “an insight into an event that was uniquely available” to a direct participant).
Goldsmith’s testimony indicates that Cassese realized his “mistake” when he purchased the DPRC shares, not merely after the fact. Goldsmith stated that Cassese told him he had purchased the DPRC shares because he was angry about Compuware’s failure to pursue acquisition of Computer Horizons.
Q: Without getting into your assumptions, did Mr. Cassese say anything else about the purchase of DPRC shares?
A: He related that he was either upset or angry ....
CXQ: [D]id he say to you in words or substance that the reason he bought the DPRC stock on June 22nd was that he was upset about the Compuware-[Computer Horizon] deal not going through?
A: Again, I don’t recall the specific words, but that was the impression that I got when I talked to him.
Trial Tr. at 207-08.
Viewing this testimony in the light most favorable to the government, I cannot agree with the majority that Goldsmith did not know what Cassese was upset about, nor with the district court that his testimony did little to prove the government’s theory of motive, see United States v. Cassese, 290 F.Supp.2d at 457. A rational jury could infer from this testimony that Cassese had volunteered his motive to Goldsmith: he had bought the DPRC *108stock not because he was looking to diversify his portfolio, but because he was upset about the failure of his own deal with Compuware. As the majority observes, it is not illegal to buy stock because one is upset or angry. But when, as in this case, the upset purchaser (1) knows he is trading on nonpublic information; (2) knows from his business experience that such trading is strictly policed; (3) has been warned (by a Confidentiality Agreement) that any trading on nonpublic acquisition information is unlawful; (4) subsequently attempts to undo his charged stock purchases; and (5) admits that these purchases were a “stupid mistake,” so that his listener understands him to mean that “he bought stock in a company that he should not have done,” I conclude that a rational jury could find beyond a reasonable doubt that the purchaser willfully violated federal securities law.4
Accordingly, I respectfully dissent from the majority’s decision to affirm the judgment of acquittal on the ground that the government failed to adduce sufficient evidence to prove willfulness.
2. The District Court’s Alternative View of Willfulness
In a post-verdict ruling, the district court concluded that willfulness, for purposes of a criminal Rule 14e-3(a) violation, required the government to prove more than Cassese’s awareness of the general unlawfulness of his stock purchases; it required proof that he knew that the nonpublic information at issue related to a tender offer. See United States v. Cass-ese, 290 F.Supp.2d at 450.5 If such “relationship knowledge” were in fact required to support Cassese’s conviction, the government’s conceded failure to adduce evidence on this point could provide an alternative ground for affirming the judgment of acquittal in this case. Accordingly, I briefly explain why I do not agree with the district court’s construction of willfulness.
a. The Established Precedents as to Willfulness
This court’s decisions in United States v. Peltz, 433 F.2d 48, and United States v. *109Dixon, 536 F.2d 1388, both authored by Judge Friendly, stand as established precedent that the only proof of knowledge required to establish a willful violation of the Exchange Act is the defendant’s awareness of the general unlawfulness of his conduct. Peltz holds that willfulness is established by proof simply that the defendant knew that “he was doing a wrongful act,” provided the “knowingly wrongful act involve[d] a significant risk of effecting the violation that ... occurred.” 433 F.2d at 55. Dixon reiterates this exact construction of willfulness. 536 F.2d at 1395. In both cases, Judge Friendly observed that it had been recognized from the time of the Exchange Act’s enactment that no stricter standard of willfulness was necessary to support a criminal conviction under federal securities law. See Peltz, 433 F.2d at 55 (citing William B. Herlands, Criminal Law Aspects of the Securities Exchange Act of 1931*, 21 Va. L.Rev. 139, 149 (1934)); accord Dixon, 536 F.2d at 1395. Both cases emphasize that “[a] person can willfully violate an SEC rule even if he does not know of its existence.” Dixon, 536 F.2d at 1395 (quoting Peltz, 433 F.2d at 54) (internal quotation marks omitted). The fact that a defendant can avoid incarceration “if he proves that he had no knowledge of’ the particular rule at issue was cited as a further ground for not requiring a stricter standard of willfulness. Peltz, 433 F.2d at 54 (discussing 15 U.S.C. § 78ff(a)); accord Dixon, 536 F.2d at 1395 (same).
In this case, there is no question that Cassese’s charged stock purchases presented a significant risk of effecting a Rule 14e-3(a) violation. Thus, Peltz and Dixon instruct that willfulness required that the government prove only Cassese’s awareness of the general unlawfulness of his conduct. It was not required to prove further that Cassese knew that the nonpublic information on which he traded related to a tender offer.
b. The Knowledge Elements of Rule U*e-3(a)
A second ground for rejecting the district court’s construction of willfulness is that it impermissibly expands the knowledge elements specified in Rule 14e-3(a). That rule states, in pertinent part:
If any person has taken a substantial step or steps to commence, or has. commenced a tender offer (“the offering person”), it shall constitute a fraudulent, deceptive or manipulative act or practice within the meaning of section 14(e) of the Act for any other person who is in possession of material information relating to such tender offer which information he knows or has reason to know is nonpublic and which he knows or has reason to know has been acquired directly or indirectly from:
(1) The Offering person,
(2) The issuer of the securities sought or to be sought by such tender offer, or
(3) Any officer, director, partner or employee or any other person acting on behalf of the offering person or such issuer,
to purchase or sell or cause to be purchased or sold any of such securities or any securities convertible into or exchangeable for any such securities ... unless within a reasonable time prior to any purchase or sale such information and its source are publicly disclosed.
17 C.F.R. § 240.14e-3(a) (emphasis added); see United States v. O’Hagan, 521 U.S. 642, 666-77, 117 S.Ct. 2199 (1997) (holding that Rule 14e-3(a) does not exceed SEC’s rulemaking authority); see United States v. Chestman, 947 F.2d 551, 558 (2d Cir.1991) (en banc) (upholding *110SEC authority under Section 14e “to define fraud flexibly in the context of the discrete and highly sensitive area of tender offers”).
As the highlighted language indicates, the rule employs two knowledge requirements to identify the traders who fall within its ambit: a trader must (1) know or have reason to know that he is in possession of nonpublic information, and (2) know or have reason to know that he acquired that information, directly or indirectly, from a person involved in a tender offer.6 No such knowledge requirement attaches to the rule’s relationship clause. Thus, while the government is obliged to prove the fact of a relationship between the nonpublic information at issue and a tender offer, it is not required to prove the defendant’s knowledge of that relationship.
This construction comports with the SEC explanatory release issued the same day that Rule 14e-3 was announced. See Tender Offers, Exchange Act Release No. 17120, 1980 WL 20869 (Sept. 4, 1980) [“SEC Release”]. In that release, the SEC identifies the four elements necessary to establish a violation (civil or criminal) of Rule 14e-3(a): The information upon which a defendant trades “(1) must be material, (2) must relate to a tender offer, (3) must be nonpublic and (4) must have been acquired directly or indirectly from the offering person, from the issuer or from another specified person.” SEC Release, at *6. In addressing the government’s knowledge burden with respect to these elements, the SEC states: “[F]or the last two requisites, there is a ‘knows or has reason to knovif standard by the person who has the possession of the information. For the first two requisites, i.e., materiality and relation to a tender offer, there is no ‘knows or has reason to know standard.” Id.
An agency’s interpretation of its own rules is generally accorded considerable deference. See Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965) (noting particular deference due agency’s construction of administrative regulation); see also United States v. O’Hagan, 521 U.S. at 673-74, 117 S.Ct. 2199 (noting that “[b]ecause Congress has authorized the Commission, in § 14(e), to prescribe legislative rules, we owe the Commission’s judgment more than mere deference or weight” (internal quotation marks omitted)). Thus, as the government correctly observes, courts have consistently construed Rule 14e-3(a) not to require proof of a defendant’s knowledge that the nonpublic information at issue related or even likely related to a tender offer. See, e.g., United States SEC v. Ginsburg, 362 F.3d 1292, 1304 (11th Cir.2004) (holding that “Rule 14e-3, by its terms, does not require that the offender know or have reason to know that the information relates to a tender offer”); SEC v. Sargent, 229 F.3d 68, 78 (1st Cir.2000) (“There is simply no language in the Rule indicating that a defendant must know the nonpublic information in his possession relates to a tender offer.”); see also United States v. Chestman, 88 Cr. 455(JMW) (S.D.N.Y.1988) (charging jury that “[i]t is not necessary that you find that the defendant knew that the information related to a tender offer, as long as the information did, in fact, relate to a tender offer”), aff'd, 947 F.2d 551 (not addressing jury charge).
Because the language of Rule 14e-3(a) does not support, and the SEC’s interpretative release specifically rejects, a construction of the rule that would require *111proof of a relationship-knowledge element, a court cannot, in essence, rewrite the rule by adding a relationship-knowledge requirement to the willfulness element of a criminal charge.
c. The District Count’s Stated Ground for a Stricter Construction of Willfulness
Finally, the district court’s stated reason for requiring proof of relationship knowledge as an aspect of willfulness is unconvincing. The district court concluded that relationship knowledge was essential to prove willfulness to ensure that Rule 14e-3(a) does not “impose absolute liability for all who trade on material nonpublic information” relating to tender offers. United States v. Cassese, 290 F.Supp.2d at 451. In United States v. O’Hagan, the Supreme Court observed that the federal securities laws do not impose any “general duty between all participants in market transactions to forgo [trading] based on material, nonpublic information.” 521 U.S. at 661, 117 S.Ct. 2199 (internal quotation marks omitted). No absolute liability concern arises with respect to Rule 14e-3(a), however, because its source-knowledge element limits liability to persons who trade on nonpublic information that they know or have reason to know was acquired from a person involved in a tender offer.
In its brief to this court, the government appears to construe this source-knowledge element as requiring proof only that Com-puware was an offering person and that Cassese knew that he had acquired nonpublic information from Compuware.7 It might fairly be questioned whether this accurately states the government’s burden, or whether the government was required to prove that Cassese knew or had reason to know that Compuware was an offering person for DPRC when he placed the charged trades. It is unnecessary to pursue the question of the source-knowledge burden further in this dissent, however, because the majority affirms the judgment of acquittal on other grounds. I note simply that, if a court were to conclude that the government’s construction of the source-knowledge element raised any absolute liability concerns about Rule 14e-3(a), those concerns would appropriately be addressed by more narrowly construing the source-knowledge element that the SEC recognizes, rather than by injecting into the element of willfulness a relationship-knowledge requirement that the SEC has specifically disavowed.
To summarize, because I conclude that the only knowledge the government was required to prove to establish willfulness was Cassese’s awareness of the general unlawfulness of his stock purchases, and because I conclude that a rational jury could have found such knowledge beyond a reasonable doubt, I dissent from the decision to affirm the district court’s judgment of acquittal.

. Cassese has never disputed that he knew he possessed nonpublic information about Com-puware’s acquisition agreement with DPRC, or that he traded on that information to avail himself of the resulting opportunity to profit in advance of the market.

. If Compuware had acquired Computer Horizons under the terms proposed in the Letter of Intent, Cassese would have realized a personal gain in excess of $33 million.

. Cassese earned a two-day profit of approximately $149,000 from his purchases and sales of DPRC stock.

. The government submits that Cassese’s willful violation of federal securities law was further evidenced by his use of two brokerage accounts to place his DPRC trades. If the dual purchases were to be viewed in isolation, I might agree with the majority that the inference of concealment to be drawn therefrom is too weak to support a finding of willfulness beyond a reasonable doubt. But the evidence does not stand alone and, therefore, I cannot conclude, as a matter of law, that a reasonable jury, in considering these somewhat atypical trades together with the totality of the other evidence indicating willfulness, could not give the dual trades some weight in finding willfulness.

. The district court had not charged the jury that it was necessary to find that Cassese knew or had reason to know that the nonpublic information related to a tender offer, either to prove a Rule 14e-3(a) violation generally or to prove the willfulness element of Section 32(a) of the Exchange Act. See 15 U.S.C. § 78ff(a). With respect to the relationship element of Rule 14e-3(a), the district court charged simply that the government was required to prove that at the time Cassese purchased DPRC shares, "the defendant was in possession of material nonpublic information relating to the tender offer for DPRC.” Trial Tr. at 523. As to willfulness, the court instructed:
[Tjlie government must prove that Mr. Cassese acted intentionally and deliberately with the intent to do something that the law forbids; that is, with a bad purpose to disobey or disregard the law.
Mr. Cassese need not have known that he was breaking any particular law or any particular rule. He need only have been aware of the unlawful nature of his acts. It is the theory of the defense that he did not have this requisite intent.
Id. at 528-29.

. Unlike Rule 10b-5, Rule 14e-3(a) applies "without regard to whether the trader owes a pre-existing fiduciary duty to respect the confidentiality of the information.” United States v. Chestman, 947 F.2d at 557.

. The district court’s charge to the jury was consistent with this theory as to the source-knowledge burden, instructing that the government was required to prove "that the defendant knew that the information had been disclosed to him by Compuware or from an officer, director, employee or other person acting on behalf of Compuware.” Trial Tr. at 524.