United States v. Sklena, No. 11-2589 (7th Cir. 2012)
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Sklena and Sarvey were floor traders in the Five-Year Treasury Note futures pit at the Chicago Board of Trade. Sklena was a “local,” authorized to trade only on his own behalf; Sarvey was a “broker” and could trade for himself and for his customers. On April 2, 2004, the price of the Five-Year Note futures fluctuated wildly. Sarvey and Sklena executed the series of transactions that resulted in criminal prosecution. According to the government, Sklena and Sarvey conspired to sell Sarvey’s customers’ contracts noncompetitively. The U.S. Commodity Futures Trading Commission filed a civil complaint
alleging that the two “engaged in a series of non-competitive trades” that defrauded customers out of over $2 million. Sarvey died before trial on charges of wire and commodity fraud and noncompetitive futures contract trading. In Sklena’s trial, the district court excluded Sarvey’s deposition as inadmissible hearsay. Sklena was convicted. The Seventh Circuit reversed. There was sufficient evidence to support the conviction, but the court erred in excluding the deposition testimony.
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