Yeager v. United States

557 U.S. 110 (2009)

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Nature of the Case

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Facts

Enron acquired a telecommunications business that it expanded and renamed Enron Broadband Services (EBS). D served as Senior Vice President of Strategic Development for EBS from October 1, 1998, until his employment was terminated a few months before Enron filed for bankruptcy on December 2, 2001. In the summer of 1999, Enron announced that EBS would become a “‘core’” Enron business and a major part of its overall strategy. Enron issued press releases touted the advanced capabilities claiming that the project was “‘lit,’” or operational. D and others allegedly made false and misleading statements about the value and performance of the project. On January 21, 2000, the price of Enron stock rose from $54 to $67. The next day it reached $72. At that point, D sold more than 100,000 shares of Enron stock that he had received as part of his compensation. During the next several months D sold an additional 600,000 shares. These sales generated more than $54 million in proceeds and $19 million in personal profit. The “intelligent” network showcased to the public in the press releases and at the analyst conference was riddled with technical problems and never fully developed. D was charged with fraud, insider trading, and money laundering. The jury acquitted D on the fraud counts but failed to reach a verdict on the insider trading counts. The court entered judgment on the acquittals and declared a mistrial on the hung counts. P obtained a new indictment against D focused on D’s knowledge of the project and his failure to disclose that information to the public before selling his Enron stock. D moved to dismiss all counts because reprosecution for insider trading would require P to prove that critical fact, the issue-preclusion component of the Double Jeopardy Clause barred a second trial of that issue and mandated dismissal of all the insider trading counts. The motion was denied. The court of appeals affirmed. The Supreme Court granted certiorari.