U.S. Court of Appeals, Second Circuit Case Summaries: June 13, 2008

Daily Record (Rochester, NY), Jun 13, 2008

U.S. Court of Appeals for the Second Circuit

Securities

Fraud -- Sentencing

U.S. v. Leonard

05-5523-cr

Appealed from the Eastern District of New York

Background: For the purposes of sentencing in this securities fraud case involving multiple defendants, the district court computed the loss amount as equal to the entire cost of the securities sold by the appellants on the grounds that the investors would not have invested if they realized the true size of the sales commissions.

Ruling: The court finds the securities were not entirely without value. The investors obtained an interest in a company engaged in producing and distributing a motion picture. The district court erred in not deducting from the purchase price the actual value of the instruments. The convictions are affirmed but the sentences are vacated. The case is remanded for resentencing.

Norman Trabulus and Michael F. Bachner for the appellants, and Geoffrey R. Kaiser, assistant U.S. attorney, for the appellee