United States Court of Appeals
                             FOR THE EIGHTH CIRCUIT
                                   ___________

                               Nos. 07-1811/07-2037
                                   ___________

United States,                            *
                                          *
      Appellee/Cross-Appellant,           *
                                          *       Appeal from the United States
      v.                                  *       District Court for the District of
                                          *       Minnesota.
James T. Anderson,                        *
                                          *
      Appellant/Cross-Appellee.           *
                                          *
                                          *

                                ________________

                                Submitted: January 15, 2008
                                    Filed: July 3, 2008
                                ________________

Before LOKEN, Chief Judge, MURPHY, Circuit Judge, and JARVEY, District
Judge.1
                           ________________

JARVEY, District Judge.

      Defendant James Anderson was convicted of six counts of insider trading and
five counts of money laundering arising out of his sales of stock in Zomax
Corporation, the company for which he was CEO and chairman of the board of


      1
       Judge John A. Jarvey, United States District Judge for the Southern District of
Iowa, sitting by designation.
directors. On appeal, he claims that the government's evidence was insufficient to
convict him, that the district court2 erred in failing to give his theory-of-the-case jury
instruction and that he is entitled to a new trial. The United States cross-appealed the
district court's order imposing sentence, contending that the sentence is unreasonable
because the court erroneously excluded certain stock sales as relevant conduct when
considering the U.S. Sentencing Guidelines for illegal insider training. We affirm the
defendant's conviction and sentence.

                                 Procedural History
       The grand jury for the District of Minnesota returned a thirty-count indictment
on August 2, 2005, charging the defendant, his wife Michelle Bedard-Anderson and
his friend, Neil Dolinsky. The defendant was charged with conspiracy to commit
securities fraud, 18 U.S.C. § 371; six counts of mail fraud, 18 U.S.C. §§ 1341, 1346;
seventeen counts of insider trading, 15 U.S.C. § 78(j) and 17 C.F.R. § 240.10b-5; and
six counts of money laundering, 18 U.S.C. § 1957. One of the money laundering
counts was dismissed by the government prior to trial.

       Trial commenced on May 22, 2006. The case against Neil Dolinsky was
dismissed by the government prior to the close of its evidence. Following the close
of the government's case, the district court dismissed all charges against Michelle
Bedard-Anderson, and granted the defendant's motion for judgment of acquittal on the
conspiracy count, the mail fraud counts and ten counts of insider trading. The jury
found the defendant guilty of six counts of insider trading and five counts of money
laundering. The defendant was sentenced to thirty months imprisonment, a $10,000
fine, restitution in the amount of $1,427,937.50, an $1,100 special assessment and a
three year term of supervised release. He forfeited an additional $1,990,000 to the
United States.


      2
        The Honorable Paul A. Magnuson, Senior United States District Judge for the
District of Minnesota.

                                           -2-
                                Factual Background
       Defendant James Anderson was a founder of Zomax, a replicator of compact
discs and DVDs with headquarters in Plymouth, Minnesota. Zomax's stock traded on
the NASDAQ. The case against the defendant focused on events at Zomax between
July and September of 2000. Beginning in July 2000, the defendant and other Zomax
senior officers began receiving reports from managers at Zomax indicating that the
company would fall significantly short of its expectations for third-quarter sales and
earnings. On July 17, 2000, Zomax's chief financial officer distributed a report
indicating that third-quarter sales would be approximately $60 million, significantly
short of the $73 million in sales earlier projected by the board of directors.

       Despite this projection, the defendant and other senior officers participated in
a telephone conference call on July 24, 2000, with financial analysts from the
securities industry. In that call, the defendant claimed to be optimistic about the third
quarter and projected sales of just over $75 million.

       On August 3, 2000, Zomax's controller prepared a sales report indicating that
July sales were approximately ten percent short of Zomax's earlier forecast and that
third-quarter sales would be approximately $60 million, as opposed to $75 million as
earlier projected by Zomax's general managers. The defendant was one of a few
officers in the executive group to receive this report.

       Beginning on August 4, 2000, and continuing until September 20, 2000, the
defendant liquidated every share of Zomax stock that he and his wife owned. Over
800,000 shares were sold during this period for nearly $14 million. This included the
sale of 365,250 shares of Zomax stock held in the name of the defendant and his wife
between August 4 and August 24, 2000, for approximately $6,300,000.

      On August 17, 2000, the defendant and his wife created a charitable remainder
annuity trust ("CRAT"). The trust was funded only with Zomax stock. The trustee

                                          -3-
of the trust was a certified public accountant with little or no experience as a trustee,
who had prepared income tax returns for the defendant and his wife. The defendant
directed the CPA to open a brokerage account at Charles Schwab and Company in the
name of the trust. The defendant told the trustee he wanted the Zomax stock sold and
replaced with municipal bonds.

       Between September 6 and September 20, 2000, the trustee sold all 465,000
shares of Zomax stock that had been transferred to the trust. The trustee sold this
large block of stock "below the bid" to move the stock faster. Telephone toll records
show that the defendant called or attempted to call the trustee on approximately
twenty-two occasions during the fourteen days during which the stock was sold. The
defendant expressed impatience and annoyance at the inability of the trustee to move
the stock faster. However, at the close of the evidence, the district court found that,
despite the defendant's involvement, the trustee had acted independently and
consistent with his fiduciary duties. All counts relating to the insider trading in the
CRAT stock were dismissed.

       The day after the final shares of Zomax stock held by the trust were sold, the
defendant gave approval to issue a third-quarter press release in advance of the
ordinary third-quarter press release, announcing that Zomax would not meet its third-
quarter sales and earnings projections. A copy of the press release was sent by
facsimile to the Market Surveillance Section of the National Association of Securities
Dealers as required when the company believes that the release will affect trading in
the stock. Two minutes after receiving the release, the NASDAQ suspended trading
on Zomax stock. When trading resumed thirty-seven minutes later, the price of
Zomax stock dropped from $17.38 to $9.56. On September 22, 2000, the stock closed
at $8.31 per share. By Monday, September 25, 2000, Zomax stock was trading at
$6.84 per share.




                                          -4-
        Zomax had a written policy regarding insider trading which applied to officers,
directors and other key management personnel. The policy prohibited trading in
Zomax stock on the basis of material, inside information. The policy further required
that all trading activity by officers and directors in Zomax stock be cleared in advance
by Zomax's chief financial officer and its outside attorney. The defendant knew of the
policy and never advised Zomax's CFO or its outside attorney of the sales or obtained
clearance from either of them.

                              Sufficiency of the Evidence
       Corporate insiders with knowledge of material, nonpublic information have a
duty to either disclose that information or refrain from using it in the sale or purchase
of securities. Securities Exchange Act of 1934 § 10(b), 15 U.S.C. § 78j(b) (2007); 17
CFR § 240.10b-5 (2007).3 Section 10(b) is violated “when a corporate insider trades


      3
          Section 10(b) of the Securities Exchange Act states:

               It shall be unlawful for any person, directly or indirectly, by
               the use of any means or instrumentality of interstate
               commerce or of the mails, or of any facility of any national
               securities exchange--
               ...
               (b) To use or employ, in connection with the purchase or
               sale of any security registered on a national securities
               exchange or any security not so registered, or any
               securities-based swap agreement (as defined in section
               206B of the Gramm-Leach-Bliley Act [15 U.S.C. § 78c],
               any manipulative or deceptive device or contrivance in
               contravention of such rules and regulations as the
               Commission may prescribe as necessary or appropriate in
               the public interest or for the protection of investors.

       Rule 10b-5, promulgated by the SEC pursuant to its rulemaking power under
10(b), makes it unlawful for any person
                                                                    (continued...)

                                            -5-
in the securities of his corporation on the basis of material, nonpublic information.”
United States v. O’Hagan, 

, 651-52 (1997). This is commonly referred
to as insider trading.

       This Court reviews the sufficiency of the evidence de novo, “viewing the
evidence in the light most favorable to the jury verdict and giving the verdict the
benefit of all reasonable inferences.” United States v. Birdine, 

(8th Cir.
2008). “[W]e will reverse only if no reasonable jury would have reached the same
result.” United States v. Tindall, 

, 887 (8th Cir. 2006). This standard of
review is “very strict.” United States v. Spencer, 

, 913 (8th Cir. 2006)
(quoting United States v. Cook, 

, 917 (8th Cir. 2004)).

       Materiality. The defendant contends that the July 17, 2000, report was not
"material" information as required by securities law. The defendant cites testimony
from various officers and managers of Zomax who, in hindsight, expressed skepticism
over the reliability of the sales forecast. The defendant concedes that the controller's
August 3rd report contained a forecast for third-quarter revenue of approximately $60


      3
       (...continued)
             (a) To employ any device, scheme, or artifice to defraud,

             (b) To make any untrue statement of a material fact or to
             omit to state a material fact necessary in order to make the
             statements made, in the light of the circumstances under
             which they were made, not misleading, or

             (c) To engage in any act, practice, or course of business
             which operates or would operate as a fraud or deceit upon
             any person, in connection with the purchase or sale of any
             security.

17 C.F.R. 240.10b-5 (2007).


                                          -6-
million. Despite the fact that this report contained actual sales revenue from July
2000, the defendant again states that the report was not material because Zomax
reports were rarely accurate and because Zomax had prospects for new business that
the defendant contends could have made up the $15 million shortfall.

       To violate insider-trading laws, the corporate insider must use material,
nonpublic information. United States v. O’Hagan, 

, 652 (1997). Further,
“[t]o establish a criminal violation of Rule 10b-5, the Government must prove that a
person ‘willfully’ violated the provision” and had knowledge of the rule. 

66. “Fraudulent intent need not be proven directly, but can be inferred from the facts
and circumstances surrounding the defendant’s actions.” United States v. Mooney,

, 944 (8th Cir. 2005) (citing United States v. Flynn, 

, 929
(8th Cir. 1999)).

      Information is material if there is a “substantial likelihood that a reasonable
investor would consider it important in making an investment decision.” 

. While speculative or “soft” information is often immaterial, courts have
been reluctant to find it per se immaterial. See United States v. Smith, 

,
1065 (9th Cir. 1998) (“We have never held – nor even hinted – that forward-looking
information or intra-quarter data cannot, as a matter of law, be material.”), overruled
on other grounds by Konop v. Hawaiian Airlines, Inc., 

, 1042 (9th Cir.
2000). This court in Mooney found that an uncertain stock price increase was
material, even though speculative, because “it would have been considered important
in making investment decisions.” 

.

       Several witnesses at trial expressed varying degrees of criticism of the
reliability of the company's preliminary or "flash" sales reports. There was evidence
that the reports had been significantly inaccurate at times. However, Zomax's
controller testified about the detailed nature of these reports. The reports were
important to the company, so important that they were prepared from information

                                         -7-
supplied by the controller and general manager of each of Zomax's facilities. The
manner in which these reports was protected by the company also suggests that they
were more reliable and more important than the testimony of Zomax officers would
suggest. The reports were treated as highly confidential and only a very small number
of individuals had access to this information.

       There was also testimony from an industry analyst who made it clear that
institutional investors relied heavily on the sales forecasts disseminated to the public.
It stands to reason that these institutional investors would want to know that Zomax
deeply discounted the value of its most recent forecasts in favor of older, historical
trends when predicting Zomax's third-quarter performance. Anderson's suggestion
that Zomax was likely to capture other new sales that would make up the deficit in
third-quarter sales is supported by exceedingly weak evidence. The jury was
instructed on this as a part of the theory of the defense. The jury was under no
obligation to accept it. It could find that the defendant traded on material inside
information.

       "On The Basis Of". The defendant contends that he did not trade "on the basis
of" material, nonpublic information because of a preexisting plan that he had to sell
the stock. To prove insider trading, the Government must show that Anderson traded
“on the basis of material, nonpublic information.” 

(1997)
(emphasis added). This requires that the defendant did not just possess the
information but actually used the information. United States v. Smith, 

,
1069 (9th Cir. 1998). “[T]he government may not rest upon a demonstration that the
suspected inside trader bought or sold while in possession of inside information;
rather, it must, at a minimum, prove that the suspect used the information in
formulating or consummating his trade.” 

n.28. Use of such information
can be established through circumstantial evidence. 

(“It is certainly not
necessary that the government present a smoking gun in every insider trading



                                          -8-
prosecution.”). The court in Smith described the type of circumstantial evidence that
might establish insider trading:

             [F]or instance, that an individual who has never before
             invested comes into possession of material nonpublic
             information and the very next day invests a significant sum
             of money in substantially out-of-the-money call options.
             We are confident that the government would have little
             trouble demonstrating ‘use’ in such a situation, or in other
             situations in which unique trading patterns or unusually
             large trading quantities suggest that an investor had used
             inside information.

The government also need not show that the inside information was the
sole reason for the sale or purchase of securities. 

n.28. It is enough that
the information was a “significant factor.” 

showed that the defendant announced no formal plan in the spring
of 2000 to sell Zomax stock. Zomax's chief financial officer testified that he was
aware of Anderson's previous sales of stock and that he knew that Anderson would
sell more stock. The chairman of Zomax's board of directors at the time of trial
testified that Anderson's sales of Zomax stock were of particular interest to the board
of directors. The board knew that Anderson would, from time to time, buy and sell
Zomax stock. The board was interested to know Anderson's motivation at times for
owning or selling Zomax stock. However, aside from this vague testimony
concerning the defendant's propensity to buy and sell Zomax stock, there is no
indication that the defendant announced a plan in 2000 to completely liquidate all of
his Zomax stock within an eight week period during the third quarter of 2000.
Further, these sales violated the Zomax policy requiring pre-clearance of the intended
sales by the company's chief financial officer and outside counsel. The jury could find
that the defendant traded "on the basis of" nonpublic information.



                                         -9-
       Nonpublic Information. The defendant next contends that the jury could not
find that he traded on the basis of "nonpublic" information. NASD rules require that
the company issue a pre-release report when the company anticipates releasing
financial information that has the potential to significantly affect trading in the stock.
On September 21, 2000, defendant Anderson gave authorization to issue Zomax's pre-
release concerning its third-quarter performance. That pre-release suggested that the
failure of Zomax to achieve projected sales in the third quarter was attributable to
general market softness in its European sales, the fact that Zomax's largest customer,
Microsoft,4 had not renewed an important piece of third-quarter business called the
TechNet Refresh and because of higher polycarbonate prices.

       The defendant contends that all of this information had been available to the
public. According to Zomax's CFO, the company had not told the investing public of
these events prior to September 21. Industry analyst William Warmington testified
that because there was not a lot of publicly available information about this
specialized business, the industry relied heavily on Zomax management for
information about its business. The loss of the Microsoft business was well known
to Zomax in the spring of 2000 but was not disclosed to the public. In July, Anderson
had told industry analysts that Zomax had been stockpiling polycarbonate and
therefore trends in polycarbonate prices were not an issue for Zomax. While the price
of polycarbonate would certainly be public information, the securities industry had no
way to determine its effect on Zomax other than to receive information from Zomax.
The jury could find that the defendant traded on the basis of nonpublic information.

                        Denial of Proposed Jury Instruction
       The defendant next contends that he was entitled to a "good-faith" instruction
stating that the evidence included grounds to find that the defendant acted in good
faith by selling his Zomax stock pursuant to a pre-existing plan. Although this


      4
       Microsoft accounted for approximately 40% of Zomax's sales in 2000.

                                          -10-
specific instruction was denied, the court instructed the jury that it was defendant's
position that the August sales of Zomax stock were based upon considerations that
had nothing to do with the information that the government claimed was material
inside information. Further, the court instructed the jury that a defendant who acts in
good faith cannot be found to have the requisite knowing, willful or specific intent to
defraud. The good-faith defense instruction further informed the jury that an honest
mistake of judgment or negligence was not the equivalent of unlawful intent, that a
person who believes in good faith that his actions comply with the law cannot be
found guilty of willfully violating the law and that it remained the government's
burden of proof to show that the defendant acted with the intent to defraud.

       A defendant is entitled to a jury instruction if the request is timely, supported
by the evidence, and a correct statement of the law. United States v. Meads, 

, 601 (2007). A defendant is not entitled to a “particularly worded instruction.”

States v. Claxton, 

, 423 (8th Cir. 2002) (internal
quotation marks omitted)). Further, a defendant is not entitled to an instruction that
contains specific facts and details; a court may give an instruction with a generalized
description of the law and facts. See United States v. Johnson, 

, 752 (8th
Cir. 2002) (refusing an instruction that specifically named alleged co-conspirators and
described specific conduct). As noted above, there was little evidence to support the
claim of a preexisting plan to sell the stock.

       This court reviews the denial or acceptance of a proposed jury instruction for
abuse of discretion. United States v. Counce, 

, 1019 (8th Cir. 2006).
This includes a denial of an instruction regarding a theory of defense. See, e.g.,
United States v. Meads, 

, 601 (2007) (reviewing the denial of a mere
presence theory-of-defense instruction for abuse of discretion). “There is no abuse of
discretion in denying a defendant’s requested instruction ‘if the instruction actually
given by the trial court adequately and correctly cover the substance of the requested
instruction.’” 

(quoting United States v. Serrano-Lopez, 366

                                         -11-
F.3d 628, 637 (8th Cir. 2004)). The jury instructions here properly covered the issue
of good faith.

                Admission of Evidence Over a Rule 403 Objection
       The defendant contends that the court should not have admitted evidence of
Zomax's corporate policies regarding insider trading in part because no one in the
company followed it. He further contends that the trial was rendered unfair by
remarks made during opening statements and evidence relating to the CRAT sales and
other charges that were dismissed during trial.

       Rule 403 states the court “may exclude evidence if its probative value is
substantially outweighed by the danger of unfair prejudice, confusion of the issues,
or misleading the jury, or by considerations of undue delay, waste of time, or needless
presentation of cumulative evidence.” Fed. R. Evid. 403. The rule, however, “does
not offer protection against evidence that is merely prejudicial in the sense of being
detrimental to a party’s case. The rule protects against evidence that is unfairly
prejudicial, that is, if it tends to suggest decision on an improper basis.” United States
v. McAtee, 

, 1103 (8th Cir. 2007) (quoting Wade v. Haynes, 

, 783 (8th Cir. 1981) (internal quotation marks omitted)).

       The Zomax corporate policy regarding sales of its stock by officers was
properly admitted into evidence. It was probative of the defendant's knowledge of
insider-trading laws and of his intent to defraud. Similarly, regardless of the
disposition of the charges arising out of the sale of the CRAT stock and against the
defendant's friend, Neil Dolinsky, this evidence was also probative on the issue of the
defendant's intent.

      We have considered the defendant's other claims of error and reject them.




                                          -12-
                                      New Trial
       A district court may grant a new trial if “the interest of justice so requires.”
Fed. R. Crim. P. 33(a). A new trial is appropriate where the court “finds that the
verdict is contrary to the weight of the evidence” and where “the court believes a
miscarriage of justice may have occurred.” United States v. Smart, 

, 865
(8th Cir. 2007) (internal quotations omitted). We review the denial of a motion for
new trial for abuse of discretion. The defendant has not demonstrated a miscarriage
of justice. The trial court did not abuse its discretion in denying the defendant's
motion for a new trial.

                Government's Appeal From the Defendant's Sentence
       The government contends that the district court erred in calculating the
defendant's total offense level under the Sentencing Guidelines. The court used only
the stock sales in the counts for which the defendant was convicted in determining the
increase to the base offense level associated with the defendant's gain from
committing these crimes. Had the court used all of the defendant's August 2000 sales
of Zomax stock to calculate his gain, he would have had a total offense level of 23,
rather than 21, as determined by the court. His guideline range for imprisonment
would have been 46 to 57 months, rather than the 37 to 46 months calculated by the
district court.

       The money laundering convictions carried significantly higher punishment
pursuant to the sentencing guidelines. However, the district court found that the
money laundering Guidelines overstated the seriousness of the defendant's conduct.
The court further found that a sentence calculated pursuant to the Guidelines for
securities fraud more appropriately reflected the severity of the offenses.
Accordingly, the court departed downward pursuant to Sentencing Guideline 5K2.0
to bring the Guidelines associated with the money laundering counts in line with the
securities fraud Guidelines.



                                         -13-
       The court engaged in an elaborate discussion of the factors set forth in 18
U.S.C. § 3553(a). The court discussed the seriousness of the offense as well as the
history and characteristics of the defendant. The court determined that a sentence of
thirty months imprisonment promoted respect for the law, provided just punishment,
deterred future criminal conduct, protected the public from future crimes and avoided
unwarranted sentencing disparity. The court specifically addressed other ways in
which the defendant had suffered atypical punishment such as the loss of his
reputation and his company, the ongoing case against him from the Securities and
Exchange Commission and the harm visited upon him as a result of the fact that his
actions brought his wife and friend into the criminal justice system. The court
predicted that, upon release from prison, the defendant will lead a law-abiding life and
contribute positively to society. Finally, the court found that a sentence of thirty
months imprisonment was not disparate from other sentences for similar offenses.
The court found that the sentence was reasonable, appropriate and just.

       This court reviews a district court’s sentence for abuse of discretion. Gall v.
United States, 

, 594 (2007). A reviewing court must evaluate the
sentence for substantive reasonableness. A court “imposes an unreasonable sentence
when it ‘fails to consider a relevant factor that should have received significant
weight; . . . gives significant weight to an improper or irrelevant factor; or . . .
considers only the appropriate factors but in weighing those factors commits a clear
error of judgment.’” United States v. Mousseau, 

, 1048-49 (8th Cir.
2008) (quoting United States v. Rouillard, 

, 556 (8th Cir. 2007)). This
court may consider the degree of variance, but a sentence outside the Guidelines range
need not be justified by “extraordinary circumstances.” This court is to apply a
“totality of the circumstances” analysis, taking into account the extent of the variance
while giving deference to the district court. 

see also United States v.
Lehmann, 

, 808 (8th Cir. 2008) (“[A]s we understand Gall, we now
examine the ‘substantive reasonableness of the sentence’ by taking into account ‘the
totality of the circumstances, including the extent of any variance from the Guidelines

                                         -14-
range,’ . . . and the strength of the stated justification, while viewing the district
court’s decision through a ‘deferential abuse-of-discretion’ lens.” (quoting 

). The court here thoroughly considered the Guidelines and Section
3553(a) factors and did not abuse its discretion by imposing a thirty month sentence
of incarceration.

      The defendant's conviction and sentence are affirmed.
                      ______________________________




                                        -15-