(The news featured below is a selection from the news covered in Federal Securities Law Reporter, which is distributed to subscribers of Federal Securities Law Reporter.)

Conviction Did Not Require Showing of GAAP Violations

The 2nd U.S. Circuit Court of Appeals decided that the government was not required to present an expert witness to explain to a criminal jury the GAAP requirements regarding debt reclassifications. The court found that the GAAP requirements were not essential to the securities fraud case before the court. In fact, even if the directors and officers of the cable television providing company did satisfy the GAAP requirements, the jury could still find that they misled investors about the amount of money that the officers' and directors' family, and its other companies, owed the cable provider.

U.S. v. Rigas (2ndCir) is reported at ¶94,342.