The opinion of the court was delivered by: Judge George W. Lindberg
MEMORANDUM OPINION AND ORDER
The government charged defendant with various crimes, in a fifteen-count indictment filed on September 18, 2007. Before the Court are defendant's pretrial motions.
The following facts are alleged in the indictment. Between January 2005 and September 2005, defendant bought common stock and call option contracts of 3Com Corporation. Between May 23, 2005 and October 25, 2005, defendant mailed letters to senior employees of several investment companies, threatening the recipients with violence if the price of 3Com's stock did not reach $6.66 by October 31, 2005.
In addition, defendant bought common stock of Navarre Corporation between January and December 2006, and bought Navarre call option contracts between February 2006 and March 2007. Defendant mailed letters to individuals associated with various investment companies, in which he threatened the recipients with violence if Navarre's stock did not reach defendant's target price by certain dates.
Defendant also mailed a letter to Navarre's chief executive officer on March 13, 2006, directing him to increase the price of Navarre's stock to $6.66 within sixty days by, among other actions, disseminating false information that the CEO was "taking the company private." The letter threatened the CEO with violence if Navarre's stock price did not reach the target.
On June 9, 2006, defendant mailed letters to three individuals to whom he had previously sent threatening letters. The June 9 letters warned the recipients that "times up," and demanded that the price of Navarre's stock increase each day between June 13 and June 17, 2006. The letters also threatened to "ship a package" to targets such as relatives, friends, or neighbors, each day that the Navarre stock price did not "end green."
On January 26, 2007, defendant mailed packages to two individuals associated with investment companies. Each package contained a pipe bomb and a letter stating that "[t]he only reason you are still alive is because I did not attach one wire," and warning that "if you decide you want to keep the people around you safe, you will do as I say." The letters demanded "a rally in the stock price" of Navarre on certain dates, and specified target closing prices.
None of the recipients of the letters complied with defendant's demands, and no market activity resulted from his scheme.
The indictment charges defendant with ten counts of securities fraud, under 15 U.S.C. § 78j(b), 18 U.S.C. § 2, and Securities and Exchange Commission Rule 10b-5, 17 C.F.R. 240.10b-5. The indictment also charges defendant with two counts of mailing threatening communications, in violation of 18 U.S.C. § 876; two counts of possessing an unregistered destructive device, in violation of 26 U.S.C. § 5861(d); and possessing a destructive device in furtherance of a crime of violence, in violation of 18 U.S.C. § 924(c).
Before the Court is defendant's motion to dismiss the securities fraud counts of the indictment (Counts 1 through 10), his motion to suppress certain evidence, and four other pretrial motions.
Defendant moves to dismiss the first ten counts of the indictment, which charge him with securities fraud, on the basis that these counts fail to state an offense. Defendant is charged with violating Section 10(b) of the Securities Exchange Act, which provides:
It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, . . .--
(b) To use or employ, in connection with the purchase or sale of any security registered on a national securities exchange . . . any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors. 15 U.S.C. § 78j(b). Rule 10b-5 states, in pertinent part: It shall be unlawful for any person, ...