## Facts

- Federal prosecutors charged multiple defendants, including brokers and traders, with participating in a securities front-running scheme involving misuse of confidential order-flow information and sharing it with a day-trading firm.
- The indictment included conspiracy and substantive securities-fraud counts, plus certain combinations of witness tampering and Travel Act charges.
- Defendants filed pretrial motions to (i) strike allegedly prejudicial indictment captions as surplusage, (ii) obtain a bill of particulars, (iii) sever defendants or counts, (iv) suppress defendant Michael Picone’s SEC testimony and dismiss a related false-statements count, (v) suppress defendant Timothy O’Connell’s statements to law enforcement, and (vi) compel additional pretrial disclosures.
- Picone had testified under SEC subpoena in a civil investigation before indictment; he and counsel were aware of parallel SEC and criminal inquiries when he testified.
- The record reflected that the SEC initiated its investigation independently; the U.S. Attorney’s Office did not direct the SEC’s questioning and did not prompt the SEC to investigate Picone.

## Issues

1. Whether descriptive headings and captions in the indictment should be stricken as inflammatory surplusage under Federal Rule of Criminal Procedure 7(d).
2. Whether defendants were entitled to a detailed bill of particulars identifying specific acts, trades, false statements, and unindicted co-conspirators in a complex securities-fraud prosecution.
3. Whether severance was required to avoid prejudice from joinder of defendants or counts.
4. Whether Picone’s SEC testimony should be suppressed, and a false-statements count dismissed, because the SEC proceeding allegedly functioned as a civil proxy for criminal investigation.
5. Whether O’Connell’s statements should be suppressed as involuntary or obtained in violation of Miranda and due process.
6. Whether the court should order expanded pretrial disclosures beyond Rule 16, Brady, Giglio, and the Jencks Act.

## Decision

- Denied the motions to strike indictment language: the captions were relevant to the charged conduct and were not improper surplusage.
- Largely denied the motions for a bill of particulars: the indictment and discovery provided adequate notice; particulars could not be used to obtain detailed evidentiary preview.
- Denied severance: defendants did not show sufficient prejudice at the pretrial stage to overcome the preference for joint trials in conspiracy cases.
- Denied suppression of Picone’s SEC testimony and denied dismissal of the false-statements count: the SEC was not used as a proxy for the prosecution, and there was no improper governmental deception or overreaching.
- Denied suppression of O’Connell’s statements: the statements were voluntary and not obtained in violation of his rights.
- Denied requests for additional pretrial disclosures beyond existing legal obligations and timing rules.

## Legal Principles

- Under Rule 7(d), surplusage is stricken only when the challenged allegations are both irrelevant to the charged offense and inflammatory or prejudicial; relevant allegations are not stricken merely because they are damaging.
- Indictment captions and organizational headings may remain when they accurately describe the charged scheme and aid readability, rather than add extraneous accusations.
- A bill of particulars is limited to ensuring adequate notice, minimizing surprise, and protecting against double jeopardy; it is not a device to force the government to itemize proof or provide broad discovery.
- Parallel civil and criminal investigations are permissible; suppression of civil-agency testimony requires a showing that prosecutors manipulated the civil process through deception or improper direction such that the testimony is constitutionally tainted.
- Voluntariness governs admissibility of statements; absent coercion or rights violations, statements to investigators are not suppressed.
- Courts generally will not compel pretrial disclosure beyond Rule 16, Brady, Giglio, and the Jencks Act or alter statutory timing absent a specific legal basis.

## Conclusion

The court denied defendants’ principal pretrial requests, holding that the indictment’s descriptive captions were proper, the charging papers and discovery provided sufficient notice without extensive particulars, joint trial remained appropriate, and suppression was unwarranted where SEC and prosecutorial investigations proceeded in parallel without prosecutorial manipulation or coercion and the challenged statements were voluntary.


United States v. Mahaffy, 446 F. Supp. 2d 115 (E.D.N.Y. 2006)