United States v. Bloom, No. 15-1445 (7th Cir. 2017)Annotate this Case
In 2007 Sentinel Management Group collapsed. Sentinel managed short-term cash investments for futures commission merchants, individuals, hedge funds, and other entities. Its bankruptcy left customers and creditors in the lurch: over $600 million was lost. Sentinel’s president and CEO, Bloom, was convicted of 18 counts of wire fraud and investment adviser fraud, based on evidence that Bloom, despite assuring customers otherwise, put their funds at significant risk by using them as collateral for Sentinel’s risky proprietary trading; that Bloom fraudulently manipulated the rates of return paid to clients on their investments; and that Bloom continued to accept new customer funds even after he knew that Sentinel was about to collapse. The Seventh Circuit affirmed, rejecting challenges to the sufficiency of the evidence and to evidentiary rulings and claims of prosecutorial misconduct by characterization of evidence and by accusing the defense of wasting time. The court upheld the district court’s choice of a jury instruction on the meaning of a federal regulation governing futures commission merchants and its imposition of a sentence of 168 months in prison.