The Circuit reversed, in part, an Amended Judgment that imposed restitution under the MVRA, because, although the defendant was responsible for the $479,000 losses to purchasers of stocks traded on the public market, the government didn’t establish that the $1.85 million of losses from the “private placement” trades were foreseeable to Goodrich.
Defendant Goodrich, a broker-dealer in the over-the-counter securities market, pleaded guilty to a conspiracy to commit securities fraud, in violation of 18 U.S.C. § 371. Goodrich executed fraudulent trades with co-defendants to artificially inflate the share price of a sham company named, Cubed, Inc. Op at 3-4 (They allegedly engaged in a “pump and dump” market manipulation scheme, through “wash” and “matched” trades); see Op at 4, 6, footnotes 1 & 4 defining a pump & dump scheme and wash and matched trades).
Goodrich executed trades in the public market, while “his co-defendants, who are not appellants here, …