United States v. Atul Bhagat

436 F.3d 1140 UNITED STATES of America, Plaintiff-Appellee, v. Atul BHAGAT, Defendant-Appellant. No. 03-10029. United States Court of Appeals, Ninth Circuit. Argued and Submitted April 12, 2004. Submission Withdrawn September 1, 2004. Resubmitted July 6, 2005. Filed February 8, 2006. COPYRIGHT MATERIAL OMITTED Mary McNamara, Swanson & McNamara LLP, San Francisco, CA, for the defendant-appellant. Amber S. Rosen, Assistant United States Attorney, San Jose, CA, for the plaintiff-appellee. Appeal from the United States District Court for the Northern District of California; Ronald M. Whyte, District Judge, Presiding. D.C. No. CR-01-20173-RMW. Before: SCHROEDER, Chief Judge, TASHIMA, and RAWLINSON, Circuit Judges. RAWLINSON, Circuit Judge: 1 Appellant Atul Bhagat (Bhagat) challenges his convictions for insider trading; for securities tipping; and for obstructing the course of an SEC investigation. 1 2 Because any new factual theory referenced by the government during closing arguments was introduced for the proper purpose of impeaching Bhagat's credibility, and did not effect a constructive amendment or material variance of the indictment; the instructions conveyed all of the…

Appellant Atul Bhagat (Bhagat) challenges his convictions for insider trading; for securities tipping; and for obstructing the course of an SEC investigation.

Because any new factual theory referenced by the government during closing arguments was introduced for the proper purpose of impeaching Bhagat’s credibility, and did not effect a constructive amendment or material variance of the indictment; the instructions conveyed all of the elements needed to obtain a conviction on the obstruction charge; and sufficient evidence supports Bhagat’s conviction, we affirm the judgment of conviction.

Because the court determined the amount of profit under a mandatory guidelines system, we remand the sentence pursuant to United States v. Ameline, 409 F.3d 1073 (9th Cir.2005) (en banc).

I. FACTUAL and PROCEDURAL BACKGROUND

Bhagat’s employer, Nvidia Corporation (Nvidia), successfully competed for a mul-ti-million dollar contract to develop a video game console (the X-Box) for the Microsoft Corporation. Upon receiving the contract, Nvidia’s Chief Executive Officer (CEO) sent a company-wide e-mail late Sunday night announcing the contract award. The next morning, Nvidia sent a number of…

dissenting.

Atul Bhagat (“Defendant”) was charged in a seven-count indictment with: (1) securities fraud (insider trading) in violation of 15 U.S.C. §§ 78j, 78ff, and 17 C.F.R. § 240 .10b-5 (Counts One and Two); (2) making false statements to the Securities and Exchange Commission (“SEC”) in violation of 18 U.S.C. § 1001 (Counts Three, Four, Five, and Six); and (3) obstruction of justice in violation of 18 U.S.C. § 1501 *1150 by providing false information in an SEC investigation (Count Seven). After a trial by jury, Defendant was convicted of all counts, except Count Four.

Defendant is an engineer and was employed by NVIDIA Corporation, a Silicon Valley manufacturer of graphics processor and media communications devices. On March 5, 2000, NVIDIA entered into a contract with Microsoft to develop and manufacture a 3-D graphics processor for Microsoft’s new video game console, the “X-Box.” As to how Defendant obtained insider information about that contract, paragraphs 6 and 7 of the indictment alleged:

The indictment then charged, and Defendant does not contest, that later the same day (at 12:23 p.m.), he purchased 1,000 shares of NVIDIA stock at 61-3/4 and 61-7/8 per share. The…