Your gain is our loss.

Guidelines commentary interpreting "amount of loss" to include "amount of gain" is fine.

United States v. Yafa, Nos. 23-4108, 23-4254, and 23-4330, decided May 15, 2025.

Panel: Circuit judges Murguia (Obama), Sanchez (Biden), and Holly Thomas (Biden).

Author: Chief Judge Murguia.

Advocates: Marc Fernich, Esq., of New York, New York, on brief and at argument, for the defendants. Assistant United States Attorney Daniel Zipp, of San Diego, on brief and at argument for the government.

The defendants were convicted of two counts involving securities fraud in connection with a pump-and-dump stock manipulation scheme. At the time of sentencing, the Guidelines pegged the total offense level to the amount of loss engendered by the fraud. But the commentary to the Guideline (since deleted and transferred to the Guideline itself) said that if computing the amount of loss was too hard, the court could rely on the amount the defendants gained through their fraud as an alternative method of computing amount of loss. The defendants objected, contending that the commentary was unreliable under Kisor v. Wilkie, 588 U.S. 558 (2019). The Ninth Circuit had previously held that Kisor’s deference framework applied to the Guidelines. Here, deference was appropriate because the term “amount of loss” is genuinely ambiguous, interpreting “amount of loss” to use “amount of gain” as a proxy was reasonable, and the Commission’s commentary was entitled to controlling weight. The sentences were affirmed.

The decision is here.