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United States v. Coscia - 866 F.3d 782 (7th Cir. 2017)

Rule:

The Fifth Amendment's guarantee that no person shall be deprived of life, liberty, or property, without due process of law forbids vague criminal laws. This gives rise to the general rule that prohibits the government from imposing sanctions under a criminal law so vague that it fails to give ordinary people fair notice of the conduct it punishes, or so standardless that it invites arbitrary enforcement.

Facts:

The Government alleged that the defendant, Michael Coscia commissioned and utilized a computer program designed to place small and large orders simultaneously on opposite sides of the commodities market in order to create illusory supply and demand and, consequently, induce artificial market movement. Mr. Coscia was charged with violating the anti-spoofing provision of the Commodity Exchange Act, 7 U.S.C. §§ 6c(a)(5)(C) and 13(a)(2), and with commodities fraud, 18 U.S.C. § 1348(1). During trial, a number of testimonies were presented to support the contention that Coscia's programs functioned within their intended parameters. He was convicted by a jury. Coscia appealed his conviction, alleging that the anti-spoofing statute is void for vagueness and, that in any event, the evidence adduced against him did not support conviction on this particular count. Furthermore, Coscia asserted that the Government produced insufficient evidence with regard to the commodities fraud violation.

Issue:

Is Coscia’s conviction erroneous based on his challenges on vagueness and insufficient evidence?

Answer:

No.

Conclusion:

The Court held that Coscia’s vagueness challenge to the anti-spoofing provision of the Commodity Exchange Act failed because the statute clearly defined the term "spoofing," providing sufficient notice of the prohibited conduct. According to the Court, Coscia’s actions fell well within the core of the anti-spoofing provision's prohibited conduct. Moreover, the Court ruled that Coscia’s spoofing conviction was supported by sufficient evidence because he engaged in ten weeks of trading during which he placed orders with the clear intent to cancel those orders prior to execution. With respect to the commodities fraud violation, under 18 U.S.C.S. § 1348(1), the Court opined that there was more than sufficient evidence to support the jury's verdict because the evidence supported the conclusion that defendant designed a scheme to pump and deflate the market through the placement of large orders, and his scheme was deceitful.

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