Volume 63, Issue 2, 567-594
In United States v. Berger, the Court of Appeals for the Ninth Circuit departed from the Second and Fifth Circuits regarding the standard required to determine loss for securities fraud under the Federal Sentencing Guidelines. Unlike its sister circuits, the Ninth Circuit held that the Supreme Court’s reasoning in Dura Pharmaceuticals, Inc. v. Broudo for loss causation in civil securities fraud actions did not apply to the criminal sentencing context. Instead, the Ninth Circuit endorsed price inflation, which was rejected in Dura Pharmaceuticals, as a method of determining loss under the Guidelines. This Note examines the circuits’ decisions in light of the crime and punishment of securities fraud and concludes that the Ninth Circuit’s reasoning better accords with the culpability of securities fraud offenders.