A federal appeals court in reversing the convictions of four men has ruled that an expert's testimony exceeded the permissible scope of opinion testimony. (United States v Scop, 844 F.2d 135 (2d Cir. 1988).)
Rule 704 of the Federal Rules of Evidence states "testimony in the form of an opinion or inference otherwise admissible is not objectionable because it embraces an ultimate issue to be decided by the trier of fact."
While this case involved fraud convictions allegedly involving a securities scam, the ruling was directed at what testimony is not permissible under rule 704. The expert, when asked whether there was a scheme to defraud investors, phrased his answer in terms of a legal conclusion. The appeals court said that:
Had [the expert] merely testified that controlled buying and selling of the type alleged here can create artificial price levels to lure outside investors, no sustainable objection could have been made. Instead, however, [the expert] made no attempt to couch the opinion testimony at issue in even conclusuory factual statements but drew directly upon the language of the statute and accompanying regulations . . . In essence, his opinions were legal conclusions that were highly prejudicial and went beyond his province as an expert in securities trading.
A petition for rehearing has been filed.
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