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Criminal Case Outcome Might Not Determine Related Civil Case Outcome
Description Appeals court held that a civil case that follows a criminal case on the same matter, may not result in collateral estoppel being used by the plaintiff to win summary judgment unless the issues in the civil case were fully developed and litigated in the criminal proceeding.
Topic Criminal Law
Key Words Securities Fraud; Collateral Estoppel
C A S E   S U M M A R Y
Facts The SEC filed civil charges against Bertoli for securities violations. The action was stayed while Bertoli was tried and convicted of criminal charges for obstruction of justice but acquitted on related racketeering counts based on alleged securities fraud. He was sentenced to 78 months in prison, supervised release, and fined $100,000. The SEC moved for summary judgment on the civil suit on collateral estoppel grounds based on findings of fact rendered by the court at sentencing proceedings. The district court granted summary judgment for the SEC and permanently enjoined Bertoli from associating with anyone in the securities industry. Bertoli appealed.
Decision Vacated and remanded. Offensive collateral estoppel is when a plaintiff may foreclose a defendant from relitigating an issue the defendant has previously litigated but lost. For collateral estoppel to apply: 1) the issues in both proceedings must be identical; 2) the issue in the prior proceeding must have been actually litigated and actually decided; 3) there must have been a full and fair opportunity for litigation in the prior proceeding; and 4) the issue previously litigated must have been necessary to support a valid and final judgment on the merits. Here, some of the civil issues received little attention at the criminal trial, so the civil case must be heard distinctly from the previous criminal case.
Citation Securities Exchange Comm. v. Monarch Funding Corp., 192 F.3d 295 (2nd Cir., 1999)

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