Court Affirms Phillip Offill Conviction in Pump-and-Dump Schemes - Criminal Law - U.S. Fourth Circuit
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Court Affirms Phillip Offill Conviction in Pump-and-Dump Schemes

The Fourth Circuit Court of Appeals upheld a former Securities and Exchange Commission attorney's stock fraud conviction on Tuesday, rejecting arguments that evidence was improperly admitted during the trial.

The attorney, Phillip Offill, Jr., is considering an appeal to the U.S. Supreme Court.

Offill advised David Stocker, a securities lawyer who represented penny stock companies, on how to issue stock without completing the securities registration process. The plan involved coordinating trades to drive up the market price of the stocks before "dumping their shares on the public for millions of dollars in profits," according to Thomson Reuters News and Insight.

A Virginia jury convicted Offill last year on wire fraud and conspiracy charges stemming from pump-and-dump schemes that "cheated more than 1,500 investors out at least $2.4 million," reports CBS News. Offill was sentenced to eight years in prison.

Offill appealed the conviction, claiming that two expert witnesses, Steve Thel, a professor of securities law at Fordham University, and Denise Crawford, the Commissioner of the Texas State Securities Board, offered inadmissible legal conclusions in their testimony and improperly addressed his intent.

Offill says this testimony, "wrested the obligation to instruct the jury from the trial court and told the jury how to decide this case."

The Fourth Circuit Court of Appeals disagreed, finding that "courts and commentators have consistently concluded that expert testimony that ordinarily might be excluded on the ground that it gives legal conclusions may nonetheless be admitted in cases that involve highly technical legal issues."

Here, the specialized nature of securities law and the complex concepts involving securities registration, registration exemptions, and specific regulatory practices constituted the type of complex legal regime that warranted the admission of expert testimony that states a legal conclusion in order to assist the jury.

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