Brady requires that the government disclose material evidence favorable to a criminal defendant. Evidence is favorable if it is either exculpatory or impeaching, and it is material if there is a reasonable probability that, had the evidence been disclosed to the defense, the result of the proceeding would have been different. A showing of materiality does not require demonstration by a preponderance that disclosure of the suppressed evidence would have resulted ultimately in the defendant's acquittal, but rather, a conviction must be reversed upon a showing that the favorable evidence could reasonably be taken to put the whole case in such a different light as to undermine confidence in the verdict.
The operative indictment charged that Mahaffy, Timothy O'Connell, and David Ghysels, who were employed by various brokerage firms as stockbrokers to private clients (the "Broker Defendants"), committed securities fraud by providing confidential information belonging to their employers to the day trading firm A.B. Watley. After they were convicted, Skilling limited the scope of the honest services fraud statute to cover only fraudulent schemes effectuated through bribes or kickbacks. A short time later, the SEC began administrative proceedings in which it disclosed transcripts of investigative depositions taken prior to the first trial that contradicted or undermined the testimony of key government witnesses on a central question at trial, namely, whether the allegedly misappropriated information was confidential.
Did the government's failure to disclose portions of the transcripts violate Brady and undermined confidence in misappropriation of confidential information component of the conspiracy verdict?
Inter alia, the Appellate Court held that the government's failure to disclose portions of the transcripts violated Brady and undermined confidence in misappropriation of confidential information component of the conspiracy verdict. In addition, because the district court did not adequately instruct on the scope of honest services fraud, the court vacated that component as well.