Dynamis Secures Dismissal of the Indictment in the “Atlas Trading” Stock Fraud Case Under Ciminelli v. US
On the eve of trial, team Dynamis, led by attorney Eric Rosen, together with attorneys from Hilder and Associates, fought for and secured the dismissal of the Superseding Indictment filed against their client, John Rybarczyk in the Southern District of Texas. Not only did the Court dismiss the Indictment against Mr. Rybarczyk, but the briefing and oral argument by Mr. Rybarczyk’s legal team also secured the dismissal of the Indictment against the other six co-defendants as well.
The decision to dismiss the Indictment was heavily covered in the media, from outlets such as Law360 to CNN to Variety to the Deep Dive. Even Matt Levine of Bloomberg weighed in, providing an interesting, albeit legally and factually incorrect analysis of the decision.
Our team filed our first brief on September 5, 2023, a few months after the Ciminelli decision was issued, and just weeks after the Fifth Circuit clarified multiple elements of the federal Title 18 fraud statutes. The Government responded, and we replied in late September 2023. Extensive oral argument was held on the motion in March 24, 2024, just a week before opening statements, and we then filed a final supplemental brief to clarify some of the issues raised during oral argument. Click on the links below to read our briefing.
Ultimately, the Court agreed with our analysis, which hinged on the interplay of two recent decisions, one by the Supreme Court (Ciminelli v. United States, 593 U.S. ______ (2023)), and one by the Fifth Circuit Court of Appeals (United States v. Greenlaw, 76 F.4th 304 (5th Cir. 2023)). The Ciminelli case concerned the “right to control” theory of fraud, whereby the Supreme Court ruled that a person’s right to valuable economic information in making decisions as to whether or not to engage in a transaction was not a traditional property right protected by the fraud statutes. The Greenlaw case was slightly different. Greenlaw determined what the “specific intent to defraud” jury instruction should be. Greenlaw rejected the Government’s argument that a specific intent to defraud meant “a conscious, knowing intent to deceive or cheat someone.” Instead, Greenlaw found that a specific intent to defraud meant “a conscious, knowing intent to deceive and cheat someone.” Sometimes, one word makes all the difference, and in this case, that word - and - was critically important as it required the Government to allege (and ultimately) prove that a person not only lied but used those lies to cheat (obtain money or property from) victims.
Read the decision below to see how these two decisions came together, mandating the dismissal of the Indictment. This decision, as well as the underlying Ciminelli and Greenlaw cases, will be extremely important in analyzing the viability of ongoing and future federal fraud cases.
