Matthew Tannin's Motion for Acquittal

UNITED STATES DISTRICT COURTEASTERN DISTRICT OF NEW YORKUNITED STATES OF AMERICA-against-RALPH CIOFFI and MATTHEW TANNINDefendants.08 CR 415 (FB)ECF

MEMORANDUM OF LAW IN SUPPORT OF MATTHEW TANNIN’S MOTION FOR AJUDGMENT OF ACQUITTAL

Susan E. BruneNina M. BeattieMaryAnn SungBRUNE & RICHARD LLP80 Broad StreetNew York, New York 10004(212) 668-1900Laurie EdelsteinBRUNE & RICHARD LLP235 Montgomery StreetSan Francisco, California 94104(415) 563-0600

Attorneys for Defendant MatthewTannin

Dated: New York, New York November 2, 2009

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TABLE OF CONTENTS

TABLE OF AUTHORITIES.........................................................................................................iiiINTRODUCTION...........................................................................................................................1ARGUMENT...................................................................................................................................4I. A JUDGMENT OF ACQUITTAL SHOULD BE GRANTED ON COUNTS 5, 6,7, AND 9 BECAUSE THE GOVERNMENT FAILED TO ESTABLISH ANINTERSTATE NEXUS FOR THE WIRES........................................................................5II. THE GOVERNMENT FAILED TO OFFER SUFFICIENT EVIDENCE OFSCHEME LIABILITY REQUIRED TO ESTABLISH SECURITIES FRAUDUNDER SUBSECTIONS (A) AND (C) OF RULE 10B-5.................................................7III. THE GOVERNMENT FAILED TO ESTABLISH THAT MR. TANNIN MADEA MATERIAL MISREPRESENTATION IN CONNECTION WITH THEPURCHASE OR SALE OF A SECURITY......................................................................11A. Mr. Tannin’s Statements Regarding His Personal Investment in the FundsWere True When Made..........................................................................................12B. Mr. Tannin’s Forward-Looking Statements of Optimism Were Immaterialas a Matter of Law and Cannot Support a Conviction for Securities Fraud..........151. Mr. Tannin’s optimistic statements were immaterial as a matter of law..162. Mr. Tannin had no duty to disclose internal deliberations of the Funds...20C. The Government Failed to Present Sufficient Evidence that Mr. Tannin’sStatements Regarding Redemptions Were Untrue Statements of MaterialFact.........................................................................................................................21D. The Government Failed to Present Sufficient Evidence That an InvestorReasonably Relied on Any Alleged Misstatement or Misleading Omissionin Connection with a Purchase or Sale..................................................................221. Insufficient Evidence of a Purchase or Sale.............................................222. Insufficient Evidence of Justifiable Reliance...........................................24IV. MR. TANNIN’S ALLEGED OMISSIONS CANNOT SUPPORT ACONVICTION FOR SECURITIES FRAUD BECAUSE THE GOVERNMENTFAILED TO ESTABLISH THAT HE OWED A FIDUCIARY DUTY TO THEINDIVIDUAL FUND INVESTORS.................................................................................25

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iiV. THE GOVERNMENT FAILED TO PRESENT SUFFICIENT EVIDENCE TOPROVE MATERIAL MISREPRESENTATIONS IN FURTHERANCE OF ASCHEME TO DEFRAUD INVESTORS..........................................................................28VI. A JUDGMENT OF ACQUITTAL SHOULD BE GRANTED ON COUNT 9BECAUSE THE GOVERNMENT FAILED TO ESTABLISH THAT THETELEPHONE CALL WAS MADE IN FURTHERANCE OF THE ALLEGEDSCHEME TO DEFRAUD INVESTORS..........................................................................29VII. A JUDGMENT OF ACQUITTAL SHOULD BE GRANTED ON ALL COUNTSBECAUSE THE GOVERNMENT FAILED TO PROVE THAT MR. TANNINACTED KNOWINGLY AND WITH THE SPECIFIC INTENT TO DEFRAUD...........30VIII. A JUDGMENT OF ACQUITTAL SHOULD BE GRANTED ON COUNT 1BECAUSE THE GOVERNMENT FAILED TO PROVE A CONSPIRATORIALAGREEMENT...................................................................................................................34IX. THE GOVERNMENT FAILED TO PRESENT SUFFICIENT EVIDENCETHAT MR. TANNIN AIDED AND ABETTED MR. CIOFFI........................................36X. THE GOVERNMENT FAILED TO ESTABLISH VENUE IN THE EASTERNDISTRICT FOR THE CONSPIRACY AND SECURITIES FRAUD COUNTS(COUNTS 1 THROUGH 3)..............................................................................................37CONCLUSION..............................................................................................................................38

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