Brief Fact Summary. the President of an investment bank stock recommendation was passed by his mistress to another man she was having an affair with.
Synopsis of Rule of Law. passing insider information on agreement to all members of a conspiracy is an essential element of the conspiracy.
Issue. is passing insider information on agreement to all members of a conspiracy an essential element of conspiracy?
Held. (Oakes, J.) Yes. Passing insider information on agreement to all members of a conspiracy is an essential element of the conspiracy. The argument of the Government was that even though McDermott (D) did not agree to make insider recommendation to Gannon and Anthony, there was a conspiracy amongst the trio. Since this Circuit has already held that a conspiracy cannot be extended as against a particular defendant to include alleged co-conspirators about whom the charged person had no knowledge, the Government’s (P) evidence is not sufficient to prove, as a matter of law on the essential element of an agreement to communicate information to Gannon and at least one other person. The judgment was therefore reversed in favor of McDermott (D).
Discussion. Trial Practice 101: evidence which supports a reasonable inference that each element of its claim did in fact occur must be introduced by the party with the burden of proof. The trial judge should have granted a timely motion for directed verdict in the favor of McDermott (D) on the conspiracy charge after the Government (P) closed its case in chief. This is however based on the casebook’s excerpt in McDermott.