How Stein Could Transform Sentencing For Securities Fraud

Law360, New York (February 7, 2017, 11:39 AM EST) -- Jason P. Hernandez

Grace L. Mead A recent decision by the Eleventh Circuit Court of Appeals in the federal criminal securities fraud case United States v. Stein[1] could transform securities fraud sentencing in that circuit.

Stein clarifies the government's burden of proof to establish the amount of loss suffered by investors in criminal securities fraud cases. It elevates the government's burden by requiring the government to prove reliance — or, "but for" or factual causation — to establish investor losses for sentencing purposes. After Stein, the government must produce either direct evidence or "specific circumstantial evidence" to establish that investors relied...

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