On August 27th, the United States Court of Appeals for the Ninth Circuit reversed and remanded defendant's conviction for selling unregistered securities in violation of Rule S-8 of the Securities Act. To prove intent, the government introduced a previous SEC civil complaint for an alleged earlier violation of that rule. The court held that the admission of that evidence was an error. In order for the government to introduce the prior SEC complaint, there must have been sufficient evidence from which the jury could conclude that defendant actually committed the allegedly-similar bad act. That burden was not met, especially where, as here, the defendant settled the civil action with no admission of liability. U.S. v. Bailey.