## Facts

- Robert G. Cole, an employee with access to confidential corporate earnings information, learned the company’s earnings would miss its forecast.
- Before the information became public and the stock price fell, Cole sold his shares and avoided losses (and/or realized gains) based on material nonpublic information.
- The government charged Cole with insider trading–related federal offenses.
- Cole pleaded guilty and disgorged the illicit profits.
- A presentence report calculated an advisory Sentencing Guidelines imprisonment range and a Guidelines fine range.
- The case proceeded to sentencing, where the court considered the Guidelines and the 18 U.S.C. § 3553(a) factors.

## Issues

1. Whether a district court may impose a sentence that varies from the advisory Guidelines by reducing imprisonment while increasing the fine, based on an individualized assessment under 18 U.S.C. § 3553(a).
2. Whether such a mixed variance (downward in custody, upward in fine) is reasonable for an insider-trading offense in light of Booker and Gall.

## Decision

- The court treated the Sentencing Guidelines as advisory and conducted an individualized § 3553(a) analysis after calculating the applicable Guidelines ranges.
- The court imposed a non-Guidelines sentence consisting of a below-Guidelines term of imprisonment and an above-Guidelines fine.
- The court reasoned that insider trading is a serious breach of trust that harms investors and market integrity, requiring meaningful punishment and general deterrence.
- The court found the defendant’s personal characteristics (lack of criminal history, employment record, community and family ties, low recidivism risk) supported less incarceration than the Guidelines recommended.
- The court concluded a substantially higher fine was necessary to ensure the penalty had real punitive and deterrent force for a financially well-resourced defendant and to avoid a perception that wealth can soften accountability.
- The court stated the resulting sentence was sufficient, but not greater than necessary, to achieve the purposes of sentencing.

## Legal Principles

- After United States v. Booker, the federal Sentencing Guidelines are advisory; sentencing courts must consider them but may vary based on 18 U.S.C. § 3553(a).
- Under Gall v. United States, a court may impose a non-Guidelines sentence if it makes an individualized assessment of the facts and explains the variance by reference to § 3553(a).
- Section 3553(a) requires consideration of the offense’s nature and circumstances; the defendant’s history and characteristics; just punishment; deterrence; protection of the public; available sentences; the advisory range; disparity avoidance; and restitution.
- In economic crimes, a sentencing court may calibrate punishment by combining incarceration with substantial financial penalties where needed to achieve general deterrence and proportionality.

## Conclusion

The court exercised post-Booker discretion to craft a sentence for insider trading that reduced imprisonment but increased the fine, concluding that a fine-heavy structure—supported by a detailed § 3553(a) explanation—better achieved just punishment and deterrence for a first-time, financially capable defendant than a Guidelines-centered approach.


United States v. Cole, 622 F. Supp. 2d 632 (N.D. Ohio 2008)