Logourl black
From our private database of 14,200+ case briefs...

United States v. Smith

United States Court of Appeals for the Ninth Circuit
155 F.3d 1051 (1998)


Facts

Richard Smith (defendant) was the Vice President of North American Sales for PDA Engineering, Inc. (PDA). PDA was a publicly traded company. Smith acquired over 50,000 shares of PDA stock. Through his position with PDA, Smith learned of internal financial projections regarding the company’s future earnings. These projections showed that the company was performing below expectations. Smith then proceeded to sell all his existing shares, and he short-sold additional shares. In a short sale, the trader makes money when the share price drops. Smith’s parents also sold their shares and short-sold additional shares. Smith was investigated by the Securities and Exchange Commission (SEC) and was eventually charged with 11 counts of insider trading. At trial, the district court instructed the jury about what the government needed to prove to obtain a conviction on the insider trading counts. The district court told the jury that: (1) the government must prove a causal relationship between the material, nonpublic information in Smith’s possession and Smith’s trading of PDA stock, and (2) the nonpublic information only needed to be a significant factor in Smith’s decision to trade the stock rather than being the sole reason. The jury convicted Smith on all 11 counts of insider trading. Smith appealed to the United States Court of Appeals for the Ninth Circuit.

Rule of Law

Issue

Holding and Reasoning (O’Scannlain, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.

  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.

Here's why 251,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 14,200 briefs, keyed to 189 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.