Judge Robert Patterson
Riley and Teeple were indicted on conspiracy and substantive counts of securities fraud grounded on a scheme to trade on insider information relating to Foundry Network’s Inc.’s acquisition by Brocade Communications Systems Inc. As a result of their alleged scheme “Investment Adviser A”—which used a New York-based prime broker to trade Foundry shares—earned profits exceeding $16 million and avoided losses in excess of $11 million. Despite otherwise ruling on Riley and Teeple’s motions seeking suppression of evidence, trial severance, exclusion of witness testimony and disclosures of Brady materials, the court took under advisement their motion to dismiss the indictment for lack of venue. Distinguishing United States v. Bezmalinovic and discussing the Second Circuit’s 203 decision in United States v. Svoboda, district court denied defendants’ dismissal motion, rejecting—as premature, and as misconstruing applicable law—their argument that the indictment’s allegations did not establish venue. The indictment’s allegations suggested that because they were both experienced in securities trading, it was foreseeable to Riley and Teeple that securities transactions in Foundry would be executed in the Southern District.
