Vitaly Korchevsky v. United States, et al.

The Grand Jury Clause of the United States Constitution states that “[n]o person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury.” U.S. Const. amend. V, cl. 1. The Superseding Indictment charging Mr. Korchevsky specifically alleged illegal trades in ninety-one “Target Companies” but at trial the Government largely ignored the Target Companies and instead focused its proof on hundreds of trades in other stocks, thus making it impossible to determine whether Mr. Korchevsky had been convicted of the crimes specified in the Superseding Indictment. The question presented is whether the evidence at trial so dramatically changed the type, number, and scope of the specifically alleged trades that Mr. Korchevsky was denied his rights under the Grand Jury Clause.

In United States v. O’Hagan, 541 U.S. 642 (1997), this Court determined that there is no general duty under Section 10(b) of the Securities Exchange Act, 15 U.S.C. § 78j(b), for a market participant to forgo trading based on material, nonpublic information that he or she might possess, regardless of how it was obtained. O’Hagan, 541 U.S. at 661. The question presented is whether conduct can constitute securities violations under Section 10(b) even when a defendant has no relationship with any of the alleged victims beyond that of a counterparty to a stock transaction.