The Knabb/prosecution argument seems to be that defining the exact amount of loss is impracticable - which actually makes sense to me in these cases - how do you exactly quantify the impact of the criminal activity on the share price over a given period etc etc? So they use the amount of Knabb's criminal gain as a proxy - a common move & IMO often reasonable.
But then they construe the sentencing guideline language narrowly to make upwards ratchets apply only to victim actual losses, and not to this proxy criminal gain. So no upwards ratchet here.
On commonsense grounds this appears to be nonsense - will indeed be interesting to see what the judge says.
Did Knabb sing against anybody? I've seen courts and prosecutors take a softer line than probation in cases where somebody has helped other prosecutions significantly. Obvious rationale: the only way you usually get convictions in these cases is with somebody singing; courts tossing out plea agreements would have a chilling effect.
I see the plea agreement is sealed, unfortunately.
EDIT: One of the other cases I'm thinking of involves Locateplus/PDGT. Dan O'Riordan was charged as CEO of PDGT; he sang against the Locateplus ex-CEO and CFO. He & the prosecution argued against upwards ticks in the PSR. The judge supported their positions, explicitly referring to the valuer of insiders singing and the chilling efefct if reasonable ple agreements were not upheld.
On the other hand, there are grounds for at least questioning whether this was a deal cooked up by the prosecution to shaft the ex-CEO/CFO with everything and protect other Locateplus insiders, who from the record were quite obviously complicit but were never charged. Eg: the prosecutor, AUSA Victor Wild, was on the board of pennyscam pinky along with one of the other insiders - extraordinary! - and a bunch of other stuff.
