In a 2021 investment fund fraud and insider trading criminal trial, Brattle analysis and testimony helped the jury evaluate charges brought by the US Attorney’s Office for the Southern District of New York (SDNY) against defendant Donald Blakstad, a San Diego investment fund manager. Brattle Principal Paul Hinton’s trial testimony summarized the financial evidence regarding Mr. Blakstad’s engagement in insider trading and misappropriation of investor funds. Mr. Blakstad was convicted on all counts.


Mr. Blakstad was a stock trader and the owner and principal of Midcontinental Petroleum, Inc., an energy-focused investment fund. In US v. Blakstad, prosecutors alleged that, through two different schemes between 2016 and 2019, Mr. Blakstad and his associates misappropriated $7 million in investor funds and proceeds of insider trading.

In the first scheme, Mr. Blakstad was accused of using material non-public information about earnings and financial results to execute several trades in Illumina, Inc. options, resulting in more than $6 million in profits for him and his associates. In the second scheme, Mr. Blakstad was accused of defrauding investors by misappropriating more than $1 million in investments intended for Midcontinental Petroleum Inc. to fund personal consumption spending.

The US Attorney’s Office retained a Brattle team in early 2021 to trace the financial flows from brokerage accounts through investment fund accounts Mr. Blakstad controlled. This analysis revealed how he misappropriated investor funds and used insider trading proceeds to delay fund account exhaustion. Principal Paul Hinton testified as a summary witness after analyzing thousands of account statements and transaction records using a “last in, first out” tracing methodology.

At trial, Mr. Hinton presented the results: tracing the flow of money from investors through different accounts and eventually to expenditures that were apparently unrelated to the stated business purposes of the investment funds. Mr. Hinton also traced funds into and from accounts controlled by Mr. Blakstad to third-party accounts in which insider trading activity was conducted. Insider trading proceeds were then traced back to Mr. Blakstad and the accounts that originally provided the funds. Finally, Mr. Hinton analyzed the overall activity in the investment fund accounts to assess the extent to which this activity was consistent with the stated business purposes of the funds.

Mr. Hinton was supported by a Brattle team that included Research Analyst Natasha Barnes.


On June 28, 2021, following a two-week trial presided by US District Judge Edgardo Ramos, a unanimous jury found Mr. Blakstad guilty on all seven counts for committing insider trading and a securities offering fraud scheme that, together, yielded more than $7 million in illegal profits.

Blakstad went on to file an appeal with the Second Circuit based on several grounds, including claims that Mr. Hinton improperly testified as a summary witness under the Federal Rules of Evidence. Judge Ramos rejected Blakstad’s challenges in a November 2022 decision denying the motion for a new trial, ruling that Mr. Hinton’s testimony was properly submitted and was not impermissible expert testimony given the Brattle team’s investigation into financial records. Judge Ramos also denied a post-conviction motion for bail pending appeal in January 2022, and Blakstad is currently serving a three-year prison sentence.

The case is US v. Blakstad, case number 1:19-cr-00486, in the US District Court for the Southern District of New York.

Case Excerpts

In the court’s decision on the motion for a new trial on November 9, 2021, United States District Judge Edgardo Ramos wrote:

“The Court’s ruling stands. First, Rule 1006 permits a party to ‘use a summary, chart, or calculation to prove the content of voluminous writings, recordings, or photographs that cannot be conveniently examined in court.’ Here, Hinton testified about the results of the ‘last in, first out’ tracing methodology, which involved an analysis of voluminous records to determine the flow of money moving into and out of Blakstad’s accounts. […] Second, even if Hinton’s testimony qualified as expert testimony, there was no manifest injustice to Blakstad as a result of a lack of Rule 16 disclosure. […] Therefore, Blakstad’s motion for a new trial on the grounds of Hinton’s testimony is DENIED.”