Argued: October 22, 2018
D. Harris (John E. Roberts, on the brief), Proskauer Rose
LLP, New York, New York, for Defendant-Appellant.
C. Pitluck, Assistant United States Attorney (Jo Ann M.
Navickas and Julia Nestor, Assistant United States Attorneys,
on the brief), for Richard P. Donoghue, United States
Attorney for the Eastern District of New York, Brooklyn, New
York, for Appellee.
Before: Katzmann, Chief Judge, Kearse and Chin, Circuit
A. Katzmann, Chief Judge.
Robert Schulman appeals from an October 4, 2017 judgment
convicting him, following a jury trial, of one count of
conspiracy to commit securities fraud and one count of
securities fraud. On appeal, Schulman argues that the
district court erroneously denied his motion pursuant to
Federal Rule of Criminal Procedure 29 to vacate his
convictions. According to Schulman, his convictions cannot
stand because the government adduced insufficient evidence at
trial of his criminal intent. Because the jury was not
required to credit Schulman's deposition testimony that
he intended only to brag when he tipped his friend and
financial advisor about an upcoming merger, and the evidence
taken as a whole permitted the jury to find beyond a
reasonable doubt that Schulman intended his communication to
lead to trading in securities of the company in question, we
disagree. Accordingly, we AFFIRM the
judgment of the district court.
securities fraud case calls upon us to review whether there
was sufficient evidence of criminal intent to sustain a
judgment of conviction against a tipper who did not directly
trade on material, non-public information but rather shared
it with a tippee who did. Robert Schulman appeals from a
judgment entered October 4, 2017 in the United States
District Court for the Eastern District of New York (Azrack,
J.) convicting him, after a jury trial, of one count
of conspiracy to commit securities fraud, in violation of 18
U.S.C. § 371, and one count of securities fraud, in
violation of 15 U.S.C. §§ 78j(b) and 78ff. The jury
found, in relevant part, that Schulman engaged in a
conspiracy to trade in the securities of a company called
King Pharmaceuticals ("King") using material,
non-public information that he obtained through his
representation of King while a partner at the law firm of
Hunton & Williams ("Hunton"). Schulman's
sole contention on appeal is that the government adduced
insufficient evidence at trial of his criminal intent.
arguments focus on a comment Schulman says he made to his
friend and financial advisor Tibor Klein: "[I]t would be
nice to be king for a day." App. 251. Schulman concedes
that, in making this comment, he "disclosed non- public
information to a friend who was also his financial
advisor." Appellant's Br. at 4. But, according to
Schulman, his comment was merely a "joke," App. at
251, or, as he argues now, "a boastful, imprudent"
remark, Appellant's Br. at 4. He contends that no
reasonable jury could conclude beyond a reasonable doubt-in
light of his testimony that he communicated nothing more
about King or its ongoing merger talks, see App. at
252 ("I would have never told him . . .there's a
potential merger."); id. ("[T]hat's
the extent of what I would have communicated to
him.")-that he disclosed this information "with the
expectation that [Klein would] trade on it," United
States v. Martoma, 894 F.3d 64, 79 (2d Cir. 2017);
see also Salman v. United States, 137 S.Ct. 420, 428
disagree. The evidence here, taken as a whole, is sufficient
to support the jury's verdict. The jury was entitled to
discredit Schulman's testimony in a prior deposition that
he intended only to brag and that he told Klein nothing about
King's ongoing merger talks. Extensive circumstantial
evidence supports an inference that Schulman communicated
more to Klein than that "it would be nice to be king for
a day" and that Schulman expected Klein to use the non-
public information he shared with him to trade in King
securities. Accordingly, the judgment of the district court
August 4, 2016, a grand jury in the Eastern District of New
York charged Robert Schulman and Tibor Klein with securities
fraud and conspiracy to commit securities fraud. On February
24, 2017, the district court granted Klein's motion to
sever his trial from Schulman's, and on March 6, 2017,
Schulman's trial commenced. At trial, the Government
introduced, inter alia, the testimony of a
cooperating witness, Michael Shechtman; sworn statements
Schulman made to the U.S. Securities and Exchange Commission
("SEC") in a deposition on August 27, 2012; and
notes taken during Schulman's meeting with the U.S.
Attorney's Office ("USAO") on May 19, 2015.
Schulman called, among others, his wife, Ronnie Schulman.
Neither Robert Schulman nor Klein testified at trial.
evidence at trial included the following. Schulman was a
Washington D.C.-based partner in Hunton's patent group.
Klein was the principal of Klein Financial Services, a
registered investment advisor based in Long Island, New York.
In or about 2000, Schulman and his wife, Ronnie Schulman,
hired Klein. The Schulmans gave Klein discretionary authority
over their investment accounts, meaning that Klein could
trade securities without first obtaining the Schulmans'
permission. For his efforts, the Schulmans paid Klein one
percent of their portfolio per year, an arrangement akin to
those Klein had with other clients.
three times each year, Klein traveled to the Schulmans'
home in McLean, Virginia to discuss the Schulmans'
finances. On these occasions, Klein arrived Friday afternoon,
visited with Ronnie Schulman before Robert Schulman got home
from work, and then had dinner with the Schulmans. After
dinner, the Schulmans and Klein discussed the Schulmans'
investment accounts, including, albeit ...