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Law School Case Brief

United States v. Stewart - 305 F. Supp. 2d 368 (S.D.N.Y. 2004)


The United States Supreme Court has held that the critical inquiry on review of the sufficiency of the evidence to support a criminal conviction must be not simply to determine whether the jury was properly instructed, but to determine whether the record evidence can reasonably support a finding of guilt beyond a reasonable doubt.


Defendant Martha Stewart was a chief executive officer of her own publicly traded company. The government charged Stewart with conspiracy, obstruction of an agency proceeding, and making false statements to government officials. She was also charged with criminal securities fraud in violation of 15 U.S.C.S. §§ 78b and 78ff. The government asserted that Stewart lied about the reasons for selling stock she owned in a biotechnology company (not her own company) in order to cover up an illegal trade. The government further asserted that Stewart made materially false statements regarding the sale of the stock with the intention to defraud and deceive investors in order to slow or stop the erosion of the value of her company's securities. In proving its case, the government argued that evidentiary sufficiency was the same in civil and criminal securities fraud cases. Stewart has moved for a judgment of acquittal pursuant to Fed. R. Crim. P. 29.


Was the evidentiary procedure in civil and criminal securities fraud causes similar, thereby warranting the conviction of Stewart?




The court found that the burden of proof was not the same between civil and criminal securities fraud cases, and criminal cases were subject to the "beyond a reasonable doubt" standard of proof. Based on the evidence presented, a reasonable juror could not, without resorting to speculation and surmise, find beyond a reasonable doubt that Stewart’s purpose was to influence the market in her company's securities. While the government presented evidence about Stewart’s financial stake in her company and her awareness that her own reputation was crucial to the company, there was no evidence that Stewart was concerned for the price of her company's stock. Hence, Stewart’s motion for a judgment of acquittal was granted.

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