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Expert Witness Insights by Area of Expertise
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Areas of Expertise :
Securities, Securities And Exchange Commission (SEC), Regulatory Compliance
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The exclusion of a proposed securities-law expert in the Schessel criminal case highlights that strong credentials alone do not satisfy Federal Rule of Evidence 702. This article explains how courts evaluate expert fit, helpfulness, factual support, methodology, and reliable application, and outlines practical steps attorneys can take to select and prepare experts while avoiding unsupported opinions and improper legal conclusions.
Expert testimony can play an important role in complex litigation, but professional experience and impressive credentials do not guarantee that an expert will be permitted to testify. Federal Rule of Evidence 702 requires courts to examine not only an expert’s qualifications but also whether the proposed testimony is helpful, sufficiently supported, and based on reliably applied principles and methods.
The criminal prosecution of former SCWorx Corp. CEO Marc Schessel provides a useful illustration. Before Schessel’s retrial, the district court excluded the defense’s proposed expert, securities attorney Ernest E. Badway. Public docket records and contemporaneous reporting confirm the exclusion, although the court’s detailed evidentiary reasoning is not contained in the later post-trial opinion denying Schessel’s motions for acquittal and a new trial.
The case therefore should not be used to attribute specific methodological deficiencies to Badway without consulting the court’s actual exclusion ruling or hearing transcript. It does, however, provide a useful starting point for reviewing broader Rule 702 principles.
For litigators, the central lesson is straightforward: selecting a highly qualified expert is only one part of the admissibility analysis. Courts also consider whether the witness’s expertise fits the proposed assignment and whether each opinion rests on a reliable, clearly explained analytical process.
SCWorx Corp. was a publicly traded healthcare technology company. In April 2020, the company announced that it had a committed purchase order for an initial two million COVID-19 rapid test kits, with provisions for additional weekly orders.
According to the U.S. Securities and Exchange Commission, the announcement caused SCWorx’s stock price to increase by approximately 425 percent from the previous trading day. Trading volume also rose substantially.
The SEC alleged that SCWorx and Schessel made the announcement even though the company lacked both a legitimate supplier of the test kits and an executed purchase agreement with a buyer. The SEC temporarily suspended trading in SCWorx securities from April 21 through May 5, 2020, because of questions concerning the adequacy and accuracy of publicly available information about the company.
The events led to several separate legal proceedings. Federal prosecutors brought criminal securities fraud charges against Schessel. The SEC filed a civil enforcement action against Schessel and SCWorx based on related allegations. Private shareholder litigation also followed.
Schessel’s first criminal trial ended in a mistrial after a jury poll revealed that the verdict was not unanimous. The case was then retried in the U.S. District Court for the District of New Jersey.
Before the retrial, the defense proposed attorney Ernest E. Badway as a securities-law expert. The proposed testimony reportedly concerned the role and responsibilities of securities counsel and related professional practices. The government sought to exclude the testimony, and the district court ruled that Badway could not testify as an expert at the retrial.
Because the publicly available post-trial opinion does not contain the court’s Rule 702 analysis, the exclusion should be described cautiously. The ruling should not be summarized as finding a particular methodological defect unless that conclusion is supported by the actual order or hearing transcript.
On July 10, 2024, the retrial jury convicted Schessel of two counts of securities fraud. The district court subsequently denied his motions for a judgment of acquittal and a new trial.
The expert exclusion occurred in Schessel’s criminal prosecution. It should not be confused with the SEC’s civil enforcement proceeding or the related shareholder litigation.
Securities Fraud
Financial Law
Criminal Justice
Regulatory Issues
Expert testimony can play an important role in complex litigation, but professional experience and impressive credentials do not guarantee that an expert will be permitted to testify. Federal Rule of Evidence 702 requires courts to examine not only an expert’s qualifications but also whether the proposed testimony is helpful, sufficiently supported, and based on reliably applied principles and methods.
The criminal prosecution of former SCWorx Corp. CEO Marc Schessel provides a useful illustration. Before Schessel’s retrial, the district court excluded the defense’s proposed expert, securities attorney Ernest E. Badway. Public docket records and contemporaneous reporting confirm the exclusion, although the court’s detailed evidentiary reasoning is not contained in the later post-trial opinion denying Schessel’s motions for acquittal and a new trial.
The case therefore should not be used to attribute specific methodological deficiencies to Badway without consulting the court’s actual exclusion ruling or hearing transcript. It does, however, provide a useful starting point for reviewing broader Rule 702 principles.
For litigators, the central lesson is straightforward: selecting a highly qualified expert is only one part of the admissibility analysis. Courts also consider whether the witness’s expertise fits the proposed assignment and whether each opinion rests on a reliable, clearly explained analytical process.
SCWorx Corp. was a publicly traded healthcare technology company. In April 2020, the company announced that it had a committed purchase order for an initial two million COVID-19 rapid test kits, with provisions for additional weekly orders.
According to the U.S. Securities and Exchange Commission, the announcement caused SCWorx’s stock price to increase by approximately 425 percent from the previous trading day. Trading volume also rose substantially.
The SEC alleged that SCWorx and Schessel made the announcement even though the company lacked both a legitimate supplier of the test kits and an executed purchase agreement with a buyer. The SEC temporarily suspended trading in SCWorx securities from April 21 through May 5, 2020, because of questions concerning the adequacy and accuracy of publicly available information about the company.
The events led to several separate legal proceedings. Federal prosecutors brought criminal securities fraud charges against Schessel. The SEC filed a civil enforcement action against Schessel and SCWorx based on related allegations. Private shareholder litigation also followed.
Schessel’s first criminal trial ended in a mistrial after a jury poll revealed that the verdict was not unanimous. The case was then retried in the U.S. District Court for the District of New Jersey.
Before the retrial, the defense proposed attorney Ernest E. Badway as a securities-law expert. The proposed testimony reportedly concerned the role and responsibilities of securities counsel and related professional practices. The government sought to exclude the testimony, and the district court ruled that Badway could not testify as an expert at the retrial.
Because the publicly available post-trial opinion does not contain the court’s Rule 702 analysis, the exclusion should be described cautiously. The ruling should not be summarized as finding a particular methodological defect unless that conclusion is supported by the actual order or hearing transcript.
On July 10, 2024, the retrial jury convicted Schessel of two counts of securities fraud. The district court subsequently denied his motions for a judgment of acquittal and a new trial.
The expert exclusion occurred in Schessel’s criminal prosecution. It should not be confused with the SEC’s civil enforcement proceeding or the related shareholder litigation.
Federal Rule of Evidence 702 governs the admissibility of expert testimony in federal court.
The rule first requires that the proposed witness be qualified through knowledge, skill, experience, training, or education. The party offering the expert must then demonstrate to the court that it is more likely than not that:
These requirements reflect the trial judge’s gatekeeping responsibility under Daubert v. Merrell Dow Pharmaceuticals, Inc. In Kumho Tire Co. v. Carmichael, the Supreme Court explained that this responsibility applies not only to scientific testimony but also to technical and other specialized knowledge.
The 2023 amendment to Rule 702 clarified the proponent’s burden and the court’s responsibility. It emphasized that the judge must determine whether the admissibility requirements have been established by a preponderance of the evidence. Issues involving sufficient factual support and reliable application are not automatically matters of weight for the jury.
The amendment clarified the governing framework rather than replacing Rule 702 with an entirely new admissibility standard.
An expert’s qualifications remain important, but qualifications alone do not establish that the expert’s testimony is admissible.
A securities attorney, accountant, physician, engineer, economist, or other professional may possess substantial education and industry experience. Nevertheless, the court must separately evaluate the particular opinions the witness proposes to offer.
The relevant questions include:
A court may therefore recognize that a witness is highly accomplished while still excluding some or all of the proposed opinions.
This distinction matters in securities litigation and other complex cases. Professional reputation may support an expert’s qualifications, but it cannot replace a reliable analysis of the facts and issues presented.
Effective expert selection requires more than identifying an accomplished professional. Attorneys should retain experts whose specialized knowledge closely matches the questions that must be addressed.
For example:
These categories are not rigid. One expert may possess experience across several disciplines, and a complex case may require multiple experts whose opinions address different parts of the dispute.
Attorneys serving as experts require particular care. An attorney expert may provide specialized factual or industry context when that testimony satisfies Rule 702. However, the expert should not instruct the jury on what the law means, state that a party violated the law, or tell the jury how the case should be decided.
Federal Rule of Evidence 704 provides that an opinion is not automatically objectionable merely because it embraces an ultimate issue. That rule does not make all legal conclusions admissible. Courts continue to distinguish helpful specialized testimony from opinions that improperly replace the court’s legal instructions.
The Third Circuit addressed this boundary in Berckeley Investment Group, Ltd. v. Colkitt. The court recognized that a securities-law expert could explain industry customs and practices while cautioning against testimony that merely stated legal standards or applied the law to dictate the result.
The key question is whether the expert’s specialized knowledge fits the assignment and genuinely assists the finder of fact.
Rule 702 focuses not only on who the expert is but also on how the expert reached each proposed opinion.
In Daubert, the Supreme Court identified several considerations that may help courts evaluate reliability. These include whether a theory or technique can be tested, whether it has been subjected to peer review, whether it has a known or potential error rate, whether standards control its operation, and whether it is generally accepted within the relevant field.
These factors are flexible, not mandatory. They may be highly relevant to scientific testing but less useful when a witness relies primarily on professional experience or industry knowledge.
An experience-based expert must still explain how that experience supports the opinion. The expert should identify the reasoning process connecting professional knowledge to the case-specific conclusion.
Experts should clearly describe:
Clear documentation helps the court determine whether the expert reliably applied the identified principles and methods to the facts.
General acceptance may support reliability, but it is not the only consideration. Likewise, an expert’s personal assurance that an opinion is correct is not a substitute for an explainable analytical process.
Attorneys can reduce avoidable admissibility problems by evaluating proposed expert testimony well before trial.
Practical steps include:
Counsel should also review whether the expert has answered the assigned questions without moving beyond the proper scope of testimony. An expert retained to explain industry practices, for example, should not drift into instructing the jury on the governing law.
At the same time, the expert must retain independent professional judgment. Preparation should improve clarity and completeness, not pressure the expert to reach a preferred result.
Early review may reveal unsupported assumptions, analytical gaps, inconsistent terminology, or conclusions that exceed the expert’s actual field of expertise. Addressing these concerns before the report is finalized may reduce the risk of exclusion or damaging cross-examination.
A sound expert strategy begins well before reports are exchanged or testimony is presented.
At the outset, counsel and the expert should discuss the issues requiring specialized analysis, the information needed to complete that analysis, and any limitations that may affect the expert’s work.
After reviewing the relevant materials, the expert should be able to explain not only the conclusion but also the path used to reach it. Counsel can then evaluate whether each opinion is supported, whether the methodology is adequately described, and whether the proposed testimony remains within appropriate boundaries.
These practices do not guarantee admissibility. Every Rule 702 determination depends on the particular witness, opinions, factual record, assignment, and governing law.
Nevertheless, careful expert selection and disciplined preparation can reduce avoidable challenges and produce testimony that is clearer, more reliable, and more useful to the court or jury.
The exclusion in Schessel’s criminal retrial was a case-specific district court evidentiary ruling. It does not establish a categorical rule prohibiting attorneys from serving as experts, nor does it bind other courts considering different witnesses and opinions.
The broader Rule 702 principles apply across federal litigation involving scientific, technical, or other specialized knowledge.
Whether a dispute concerns business valuation, healthcare, engineering, intellectual property, construction, environmental conditions, or financial analysis, courts must evaluate whether the proposed testimony satisfies Rule 702.
The Schessel matter therefore should be viewed as a practical reminder to examine expert fit, reliability, helpfulness, and the boundary between specialized factual testimony and legal conclusions.
Qualifications matter, but admissibility ultimately depends on the opinions the expert actually intends to present and the process supporting those opinions.
The reported exclusion of the defense’s proposed securities-law expert in Schessel’s criminal retrial provides a useful starting point for reviewing federal expert-testimony requirements. The specific grounds for that exclusion, however, should be described only with support from the court’s actual evidentiary order or hearing transcript.
The broader Rule 702 lesson is clear. Selecting a respected professional is only the beginning of the admissibility analysis.
Courts must evaluate whether the proposed testimony will help the finder of fact, whether it rests on sufficient facts or data, whether it uses reliable principles and methods, and whether those principles and methods were reliably applied.
Attorneys who focus on subject-matter fit, appropriate scope, transparent analysis, sufficient factual support, and careful preparation place themselves in a stronger position to present admissible and persuasive expert testimony.
Ultimately, thoughtful expert selection and disciplined preparation remain essential components of effective litigation strategy.
Can an attorney serve as an expert witness?
Yes. An attorney may qualify as an expert through relevant knowledge, skill, experience, training, or education. The testimony must still satisfy Rule 702 and help the finder of fact. Courts may permit an attorney expert to explain specialized industry practices or professional processes while excluding testimony that merely states governing law, gives an impermissible legal conclusion, or tells the jury what result to reach.
Does every qualified expert automatically satisfy Rule 702?
No. Qualification is only one part of the admissibility analysis. The court must also determine whether the testimony will be helpful, rests on sufficient facts or data, uses reliable principles and methods, and reflects a reliable application of those principles and methods.
Does every expert need scientific testing?
No. Kumho Tire confirms that Rule 702 applies to scientific, technical, and other specialized testimony. The appropriate reliability inquiry depends on the nature of the expertise and the opinion. Scientific testing may be important in one field, while professional standards, documented experience, or another reliable analytical process may be more appropriate in another.
What did the 2023 amendment to Rule 702 clarify?
The amendment clarified that the party offering expert testimony must demonstrate to the court that it is more likely than not that Rule 702’s admissibility requirements have been satisfied. It also reinforced that sufficient factual support and reliable application are threshold admissibility matters for the judge, not issues that must always be left for the jury to consider as questions of weight.
What should attorneys look for when selecting a securities expert?
Attorneys should consider whether the expert’s specialized knowledge matches the disputed issues, whether the proposed methodology is appropriate, whether the opinions are supported by sufficient facts, and whether the expert can clearly explain the reasoning process. Counsel should also determine whether the proposed testimony provides specialized factual assistance or risks becoming an improper legal opinion.
Federal Rule of Evidence 702 governs the admissibility of expert testimony in federal court.
The rule first requires that the proposed witness be qualified through knowledge, skill, experience, training, or education. The party offering the expert must then demonstrate to the court that it is more likely than not that:
These requirements reflect the trial judge’s gatekeeping responsibility under Daubert v. Merrell Dow Pharmaceuticals, Inc. In Kumho Tire Co. v. Carmichael, the Supreme Court explained that this responsibility applies not only to scientific testimony but also to technical and other specialized knowledge.
The 2023 amendment to Rule 702 clarified the proponent’s burden and the court’s responsibility. It emphasized that the judge must determine whether the admissibility requirements have been established by a preponderance of the evidence. Issues involving sufficient factual support and reliable application are not automatically matters of weight for the jury.
The amendment clarified the governing framework rather than replacing Rule 702 with an entirely new admissibility standard.
An expert’s qualifications remain important, but qualifications alone do not establish that the expert’s testimony is admissible.
A securities attorney, accountant, physician, engineer, economist, or other professional may possess substantial education and industry experience. Nevertheless, the court must separately evaluate the particular opinions the witness proposes to offer.
The relevant questions include:
A court may therefore recognize that a witness is highly accomplished while still excluding some or all of the proposed opinions.
This distinction matters in securities litigation and other complex cases. Professional reputation may support an expert’s qualifications, but it cannot replace a reliable analysis of the facts and issues presented.
Effective expert selection requires more than identifying an accomplished professional. Attorneys should retain experts whose specialized knowledge closely matches the questions that must be addressed.
For example:
These categories are not rigid. One expert may possess experience across several disciplines, and a complex case may require multiple experts whose opinions address different parts of the dispute.
Attorneys serving as experts require particular care. An attorney expert may provide specialized factual or industry context when that testimony satisfies Rule 702. However, the expert should not instruct the jury on what the law means, state that a party violated the law, or tell the jury how the case should be decided.
Federal Rule of Evidence 704 provides that an opinion is not automatically objectionable merely because it embraces an ultimate issue. That rule does not make all legal conclusions admissible. Courts continue to distinguish helpful specialized testimony from opinions that improperly replace the court’s legal instructions.
The Third Circuit addressed this boundary in Berckeley Investment Group, Ltd. v. Colkitt. The court recognized that a securities-law expert could explain industry customs and practices while cautioning against testimony that merely stated legal standards or applied the law to dictate the result.
The key question is whether the expert’s specialized knowledge fits the assignment and genuinely assists the finder of fact.
Rule 702 focuses not only on who the expert is but also on how the expert reached each proposed opinion.
In Daubert, the Supreme Court identified several considerations that may help courts evaluate reliability. These include whether a theory or technique can be tested, whether it has been subjected to peer review, whether it has a known or potential error rate, whether standards control its operation, and whether it is generally accepted within the relevant field.
These factors are flexible, not mandatory. They may be highly relevant to scientific testing but less useful when a witness relies primarily on professional experience or industry knowledge.
An experience-based expert must still explain how that experience supports the opinion. The expert should identify the reasoning process connecting professional knowledge to the case-specific conclusion.
Experts should clearly describe:
Clear documentation helps the court determine whether the expert reliably applied the identified principles and methods to the facts.
General acceptance may support reliability, but it is not the only consideration. Likewise, an expert’s personal assurance that an opinion is correct is not a substitute for an explainable analytical process.
Attorneys can reduce avoidable admissibility problems by evaluating proposed expert testimony well before trial.
Practical steps include:
Counsel should also review whether the expert has answered the assigned questions without moving beyond the proper scope of testimony. An expert retained to explain industry practices, for example, should not drift into instructing the jury on the governing law.
At the same time, the expert must retain independent professional judgment. Preparation should improve clarity and completeness, not pressure the expert to reach a preferred result.
Early review may reveal unsupported assumptions, analytical gaps, inconsistent terminology, or conclusions that exceed the expert’s actual field of expertise. Addressing these concerns before the report is finalized may reduce the risk of exclusion or damaging cross-examination.
A sound expert strategy begins well before reports are exchanged or testimony is presented.
At the outset, counsel and the expert should discuss the issues requiring specialized analysis, the information needed to complete that analysis, and any limitations that may affect the expert’s work.
After reviewing the relevant materials, the expert should be able to explain not only the conclusion but also the path used to reach it. Counsel can then evaluate whether each opinion is supported, whether the methodology is adequately described, and whether the proposed testimony remains within appropriate boundaries.
These practices do not guarantee admissibility. Every Rule 702 determination depends on the particular witness, opinions, factual record, assignment, and governing law.
Nevertheless, careful expert selection and disciplined preparation can reduce avoidable challenges and produce testimony that is clearer, more reliable, and more useful to the court or jury.
The exclusion in Schessel’s criminal retrial was a case-specific district court evidentiary ruling. It does not establish a categorical rule prohibiting attorneys from serving as experts, nor does it bind other courts considering different witnesses and opinions.
The broader Rule 702 principles apply across federal litigation involving scientific, technical, or other specialized knowledge.
Whether a dispute concerns business valuation, healthcare, engineering, intellectual property, construction, environmental conditions, or financial analysis, courts must evaluate whether the proposed testimony satisfies Rule 702.
The Schessel matter therefore should be viewed as a practical reminder to examine expert fit, reliability, helpfulness, and the boundary between specialized factual testimony and legal conclusions.
Qualifications matter, but admissibility ultimately depends on the opinions the expert actually intends to present and the process supporting those opinions.
The reported exclusion of the defense’s proposed securities-law expert in Schessel’s criminal retrial provides a useful starting point for reviewing federal expert-testimony requirements. The specific grounds for that exclusion, however, should be described only with support from the court’s actual evidentiary order or hearing transcript.
The broader Rule 702 lesson is clear. Selecting a respected professional is only the beginning of the admissibility analysis.
Courts must evaluate whether the proposed testimony will help the finder of fact, whether it rests on sufficient facts or data, whether it uses reliable principles and methods, and whether those principles and methods were reliably applied.
Attorneys who focus on subject-matter fit, appropriate scope, transparent analysis, sufficient factual support, and careful preparation place themselves in a stronger position to present admissible and persuasive expert testimony.
Ultimately, thoughtful expert selection and disciplined preparation remain essential components of effective litigation strategy.
Can an attorney serve as an expert witness?
Yes. An attorney may qualify as an expert through relevant knowledge, skill, experience, training, or education. The testimony must still satisfy Rule 702 and help the finder of fact. Courts may permit an attorney expert to explain specialized industry practices or professional processes while excluding testimony that merely states governing law, gives an impermissible legal conclusion, or tells the jury what result to reach.
Does every qualified expert automatically satisfy Rule 702?
No. Qualification is only one part of the admissibility analysis. The court must also determine whether the testimony will be helpful, rests on sufficient facts or data, uses reliable principles and methods, and reflects a reliable application of those principles and methods.
Does every expert need scientific testing?
No. Kumho Tire confirms that Rule 702 applies to scientific, technical, and other specialized testimony. The appropriate reliability inquiry depends on the nature of the expertise and the opinion. Scientific testing may be important in one field, while professional standards, documented experience, or another reliable analytical process may be more appropriate in another.
What did the 2023 amendment to Rule 702 clarify?
The amendment clarified that the party offering expert testimony must demonstrate to the court that it is more likely than not that Rule 702’s admissibility requirements have been satisfied. It also reinforced that sufficient factual support and reliable application are threshold admissibility matters for the judge, not issues that must always be left for the jury to consider as questions of weight.
What should attorneys look for when selecting a securities expert?
Attorneys should consider whether the expert’s specialized knowledge matches the disputed issues, whether the proposed methodology is appropriate, whether the opinions are supported by sufficient facts, and whether the expert can clearly explain the reasoning process. Counsel should also determine whether the proposed testimony provides specialized factual assistance or risks becoming an improper legal opinion.
Securities Fraud
Financial Law
Criminal Justice
Regulatory Issues
Expert Witness Insights by Area of Expertise
Expert Witness Insights by Area of Expertise