                 FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,             
                Plaintiff-Appellee,
               v.
MARSHALL ZOLP, a/k/a GARY
ANDERSON, TUCKER BINKLEY, JOHN
CASSIDY, ROBERT CASSIDY,                    No. 05-50882
MARCELINO COLT, JOHN DOUGLAS,
MARCELINO FERNANDEZ, MARSHALL                D.C. No.
                                          CR-03-00803-RGK
HAMILTON, JOHN HANCOCK, JOHN
LEHMAN, MARSHALL MCCRAE,                      OPINION
MARSHALL MCCRAY, MARSHALL
NEMITZ, ALEX SEAGROVE, FRANK
TULLY, WERNER WASSLER, MARTIN
WELLINGTON, DON WELLS and
MARSHALL VON ZOLP,
             Defendant-Appellant.
                                      
       Appeal from the United States District Court
          for the Central District of California
       R. Gary Klausner, District Judge, Presiding

                  Argued and Submitted
          January 11, 2007—Pasadena, California

                   Filed March 13, 2007

   Before: Andrew J. Kleinfeld, Raymond C. Fisher, and
            Milan D. Smith, Jr., Circuit Judges.

                  Opinion by Judge Smith



                           2975
2978                 UNITED STATES v. ZOLP


                         COUNSEL

Elizabeth A. Newman, Deputy Federal Public Defender, Los
Angeles, California, for the defendant-appellant.

Ellyn M. Lindsay, Assistant United States Attorney, Los
Angeles, California, for the plaintiff-appellee.


                          OPINION

SMITH, Circuit Judge:

   Defendant-appellant Marshall Zolp appeals the district
court’s sentence following his plea of guilty to federal securi-
ties fraud. Zolp challenges two aspects of his sentencing pro-
                       UNITED STATES v. ZOLP                       2979
ceedings: (1) the district court’s factual finding that the
involved stock was “worthless” after the fraud came to light,
and (2) the district court’s decision to consider Zolp’s cooper-
ation only as part of the larger analysis under 18 U.S.C.
§ 3553(a) and not as part of the court’s advisory guidelines
calculation. On the first issue, we vacate and remand. On the
second issue, we affirm.

                          BACKGROUND

   Zolp was a major participant in a “pump-and-dump” scheme1
involving two related companies: MegaWatt Energy Corp.
(“MegaWatt”), a California corporation, and New Energy
Corp. (“Original New Energy”), a Utah corporation with
offices in San Diego, California. MegaWatt was a privately-
held company that purportedly manufactured solar generators.
MegaWatt spun-off Original New Energy as another
privately-held company to market those generators. With
Zolp’s assistance, New Energy completed a reverse merger
with a publicly-traded company called Ubetigolf, Inc.
(“Ubetigolf”). The surviving entity was named New Energy
Corp. (“New Energy”), and public trading in New Energy
stock began on November 17, 2001. As part of the merger
transaction, Zolp was issued 300,000 shares of New Energy
stock that he placed in a brokerage account.

   In early December 2001, Zolp convinced New Energy’s
owner to hire an investment advice firm named Magnum
Financial Group (“Magnum”). Magnum was associated with
Stratos Research, which purported to be a financial research
firm that published reports regarding “micro-cap” companies
  1
    “Pump and dump” schemes “involve the touting of a company’s stock
(typically microcap companies) through false and misleading statements
to the marketplace. After pumping the stock, fraudsters make huge profits
by selling their cheap stock into the market.” U.S. Securities and
Exchange Commission, Fast Answers: Pump and Dump, at http://
www.sec.gov/answers/pumpdump.htm. See also Thomas Lee Hazen, Law
of Securities Regulation, §§ 2.2 n.80, 14.18 (5th ed. 2005).
2980                 UNITED STATES v. ZOLP
on its website. On December 14, 2001, Magnum issued a
press release announcing that New Energy had hired Mag-
num. Four days later, Magnum published a research report
regarding New Energy based on information that Zolp sup-
plied to Magnum. Magnum then issued a press release regard-
ing New Energy which included a link to the website on
which it posted that research report, and distributed the report
via email to approximately 8,000 recipients. The research
report—with Zolp’s knowledge and participation—contained
numerous material misrepresentations about New Energy. For
example, the report indicated that New Energy had significant
purchase orders “in hand” and certain service provider con-
tracts established (it did not); that MegaWatt was a “Green
Team Partner” with the Los Angeles Department of Water
and Power (it was not); and that New Energy had a joint ven-
ture with a Mexican company that was about to secure $92
million in financing from Mexican Coca-Cola bottlers (those
negotiations had been on hold for months).

   Following the publication of the research report, New Ener-
gy’s stock rose from $4.75 per share to $7.65 per share by
January 2, 2002. Zolp then directed his broker to sell his
300,000 shares and acquire an additional 500,000 shares. Zolp
continued to feed false information to Magnum and to inves-
tors concerning New Energy which further inflated the stock
price, and he continued to sell his own shares in the inflated
market. The stock reached a high of approximately $10.00 per
share before February 1, 2002, when the Securities and
Exchange Commission filed suit against New Energy and sus-
pended trading in New Energy stock.

   Zolp pled guilty after a federal grand jury indicted him on
three counts of securities fraud in violation of 15 U.S.C.
§§ 78j(b) and 78ff and 17 C.F.R. § 240.10b-5. His plea agree-
ment stipulated to some sentencing factors, including a base
offense level and several adjustments. The plea agreement did
not, however, stipulate actual or intended loss from the fraud
or the method of loss calculation under U.S.S.G. § 2B1.1. The
                     UNITED STATES v. ZOLP                  2981
plea agreement also required Zolp to cooperate with the gov-
ernment in pursuit of other participants in the scheme to
defraud, in exchange for which the government agreed to
mention any such cooperation at sentencing and to move for
a downward departure under U.S.S.G. § 5K1.1. Zolp provided
extensive cooperation which resulted in the government
apprehending Ernest Lampert, the orchestrator of the stock
fraud. The government fulfilled its bargain by moving for a
six-level downward departure in Zolp’s sentence.

   Following entry of the guilty plea, the district judge sen-
tenced Zolp to 72 months imprisonment, three years of super-
vised release, and a $100 special assessment. This sentence
included an upward departure under U.S.S.G. § 2B1.1 for
financial loss inflicted by the fraud. The district court did not
grant the government’s requested departure pursuant to
U.S.S.G. § 5K1.1, but, instead, in consideration of Zolp’s
cooperation with the government, exercised its discretion
under United States v. Booker, 543 U.S. 220 (2005) and
reduced his overall sentence by four years.

     JURISDICTION AND STANDARD OF REVIEW

   The district court had original jurisdiction under 18 U.S.C.
§ 3231. We have jurisdiction under 28 U.S.C. § 1291 and 18
U.S.C. § 3742.

   We review the district court’s interpretation of the sentenc-
ing guidelines de novo, its application of the guidelines to the
facts of the case for abuse of discretion, and its factual find-
ings for clear error. United States v. Kimbrew, 406 F.3d 1149,
1151 (9th Cir. 2005) (citation omitted).
2982                 UNITED STATES v. ZOLP
                        DISCUSSION

                               I.

                              A.

   The government sought an enhancement of Zolp’s base
offense level under U.S.S.G. § 2B1.1, which permits an
increase determined by the financial loss caused by the fraud.
The district court’s determination of loss is a finding of fact
to which we must give “appropriate deference,” see U.S.S.G.
§ 2B1.1, cmt. n.3(C), and which we review for clear error, see
United States v. Bright, 353 F.3d 1114, 1118 (9th Cir. 2004).
Nevertheless, the government bears the burden of proof on the
facts underlying a sentence enhancement. See United States v.
Ameline, 409 F.3d 1073, 1086 (9th Cir. 2005) (en banc)
(“[W]hen the government seeks an upward adjustment, it
bears the burden of proof.”) (citation omitted). Further,
“where an extremely disproportionate sentence results from
the application of an enhancement, the government may have
to satisfy a ‘clear and convincing’ standard.” United States v.
Staten, 466 F.3d 708, 717 (9th Cir. 2006) (internal citations
omitted). The government does not contest that, under Staten,
a clear and convincing standard applies here.

   [1] The guidelines do not present a single universal method
for loss calculation under § 2B1.1—nor could they, given the
fact-intensive and individualized nature of the inquiry. The
guidelines do, however, offer several possible approaches to
this calculation. The commentary to § 2B1.1 indicates that
“loss” for this purpose is “the greater of actual loss or
intended loss.” U.S.S.G. § 2B1.1, cmt. n.3(A). Actual loss is
defined as “the reasonably foreseeable pecuniary harm that
resulted from the offense.” U.S.S.G. § 2B1.1, cmt. n.3(A)(i).
Intended loss is defined as “the pecuniary harm that was
intended to result from the offense.” U.S.S.G. § 2B1.1, cmt.
n.3(A)(ii). The court need not make its loss calculation with
absolute precision; rather, it need only make a reasonable esti-
                         UNITED STATES v. ZOLP                         2983
mate of the loss based on the available information.2 U.S.S.G.
§ 2B1.1, cmt. n.3(C); United States v. Peyton, 353 F.3d 1080,
1090 n.11 (9th Cir. 2003). If the court is unable to determine
either actual or intended loss with sufficient certainty, it may
rely on the defendant’s personal gain from the fraud as an
alternate measure of loss. U.S.S.G. § 2B1.1, cmt. n.3(B).

   [2] In making a loss calculation in a case such as this, we
must distinguish between fraud relating to a “sham” company
and a “pump-and-dump” scheme involving an otherwise legit-
imate company. Prior cases—and common sense—suggest
that a security could be literally worthless after the fraudulent
scheme is exposed if the fraudulent scheme involves a “sham”
company. If the company whose stock is sold does not legally
exist or has no activities, assets, facilities, or any other source
of value, that “company” has no underlying equity. Absent
highly unusual circumstances, its stock would also be worth-
less. See, e.g., United States v. Mayo, 646 F.2d 369, 374 (9th
Cir. 1981) (purpose of conspiracy involving “sham corpora-
tions” was “bilking the unsuspecting public by foisting worth-
less stock upon it”). In such a case, the court could
appropriately determine the loss to be equal to the value of all
outstanding shares before the fraud came to light.3

   [3] Measurement of loss becomes considerably more com-
plex, however, when the court confronts a “pump-and-dump”
scheme involving an otherwise legitimate company. In such
a case, because the stock continues to have residual value
after the fraudulent scheme is revealed, the court may not
   2
     The commentary to § 2B1.1 suggests five factors the court may con-
sider in estimating the loss. The factors relevant to this case are the third
(“the approximate number of victims multiplied by the average loss to
each victim”) and the fourth (“the reduction that resulted from the offense
in the value of equity securities or other corporate assets”). U.S.S.G.
§§ 2B1.1, cmt. n.3(C)(iii) and (iv).
   3
     We do not suggest that this method of calculation would necessarily be
appropriate in all cases involving a sham corporation. Each inquiry is
highly dependent on the facts of the particular case.
2984                 UNITED STATES v. ZOLP
assume that the loss inflicted equals the full pre-disclosure
value of the stock; rather, the court must disentangle the
underlying value of the stock, inflation of that value due to the
fraud, and either inflation or deflation of that value due to
unrelated causes. See United States v. Bakhit, 218 F. Supp. 2d
1232 (C.D. Cal. 2002) (thoughtfully analyzing several
approaches to this task). See also Eisenhofer, Jarvis, &
Banko, Securities Fraud, Stock Price Valuation, and Loss
Causation: Toward a Corporate Finance-Based Theory of
Loss Causation, 59 Bus. Law. 1419 (2004) (discussing the
challenges of such calculations in the context of civil securi-
ties fraud). Cf. Dura Pharm., Inc. v. Broudo, 544 U.S. 336,
341-42 (2005) (requiring plaintiffs in civil securities fraud
cases to establish a “causal connection between the material
misrepresentation and the loss”); In re Daou Sys., Inc., 411
F.3d 1006, 1014 (9th Cir. 2005) (construing and applying
Dura).

                               B.

   With these principles in mind, we turn to the propriety of
the district court’s analysis in this case. While Zolp did not
contest the applicability of a § 2B1.1 enhancement for finan-
cial loss, the pre-sentence report (“PSR”), the government,
and Zolp each proposed a different method of calculating that
loss. The PSR found that actual loss to the investors could not
be determined, and, accordingly, recommended a calculation
based on Zolp’s personal gain from the fraudulent scheme.
The government proposed an analysis based on intended loss
from the transaction, taking the average price of the stock dur-
ing the scheme (estimated at $6.383), assuming it to be value-
less after the scheme became public ($0), and multiplying the
difference by the total number of outstanding shares. Zolp
also proposed an “intended loss” calculation, but with lesser
values, because Zolp believed the stock continued to have
value before, during, and after the fraud. The district court
generally adopted the government’s reasoning and explained
its calculation as follows:
                        UNITED STATES v. ZOLP                         2985
      When you get to the calculations of what the loss
      was, the only rational calculation of loss the court
      can consider is the difference between what the
      stocks were sold for and what they’re worth. The
      stocks sold or intended to be sold times the . . . aver-
      age value of the stock. That being taken on defense
      representation of $5.03, would be . . . $18,485,250.
      Then from that you subtract the value of the stock.
      And the stock really was worthless. It has no value
      at all. So the court would find by clear and convinc-
      ing evidence there is no question that the appropriate
      increase should be 20 levels because this is between
      seven and $20 million as far as loss is concerned.

(emphasis added). Zolp does not take issue with the district
court’s method of calculation.4 Instead, Zolp argues that the
district court’s price differential was too great (and hence the
upward enhancement too great), because the stock continued
to have value during the fraud and even after the fraud came
to light.

   [4] From the scant evidence available in the record in this
case, it does not appear that the companies involved in this
case are entirely sham operations. For example, there is evi-
dence in the record that MegaWatt, New Energy, and Ubeti-
golf were all real companies with actual states of
incorporation; that MegaWatt occupied several floors of a
hospital in Tijuana; that one of the participants in the scheme
had a warehouse containing various parts; and, most impor-
tantly, that the SEC ended its suspension of trading in New
Energy stock after the fraud came to light, allowing further
trading of New Energy stock.5
  4
    We therefore express no opinion on that issue.
  5
    If the district court deemed the stock valueless because it could not be
legally traded during the SEC’s trading freeze, the court’s decision was
clearly erroneous. Where, as here, the record suggests that the suspension
was lifted and normal trading resumed, the stock retained value during the
freeze even though shareholders had to wait to sell any of their shares.
2986                  UNITED STATES v. ZOLP
    [5] While the trading volume of New Energy stock was low
following the SEC’s lifting of its suspension of trading, the
trading volume was still greater than zero and the stock price
also rose significantly through March and into April of 2002.
The government argues that the stock nevertheless remained
“worthless” because “the trading volume is close to zero.” But
close to zero is not zero, and the government therefore
implicitly—if unintentionally—acknowledges that New
Energy stock continued to have some value after the fraud
came to light. Moreover, the government’s subsequent asser-
tion that “there was no market for New Energy Shares, and
. . . the victim investors could not sell” is directly contradicted
by evidence in the record demonstrating that substantial num-
bers of shares did sell after the fraud came to light.

   [6] The government seeks to avoid this reality by arguing
that the only investors actually able to sell shares after the
fraud came to light were two co-participants in the fraudulent
scheme—Lynn Stratford and Tor Ewald. For two reasons, this
argument is unpersuasive. First, evidence in the record does
not establish that both Stratford and Ewald were “insiders” in
the fraudulent scheme; at most, it establishes that they had
read the press releases discussed above before their public
release. Second, even if they were both “insiders,” the govern-
ment has not established that the trading volume reflected on
that chart is entirely due to sales by “insiders,” nor is it neces-
sarily the case that trade among insiders proves that the stock
has no value. It was the government’s burden to establish, by
clear and convincing evidence, that there was “no market” for
New Energy shares after the fraud came to light and after the
SEC suspension was lifted. See Ameline, 409 F.3d at 1086;
Staten, 466 F.3d at 717. The government has not met that bur-
den here.

                                II.

   Although we vacate and remand on other grounds, the dis-
trict court did not err by considering Zolp’s cooperation as
                         UNITED STATES v. ZOLP                         2987
part of its analysis under 18 U.S.C. § 3553(a) rather than as
part of its advisory guidelines calculation. Even though
United States v. Booker rendered the guidelines advisory, as
part of its sentencing analysis under 18 U.S.C. § 3553(a), “the
district court must calculate the guidelines range accurately.
A misinterpretation of the guidelines by a district court effec-
tively means that the district court has not properly consulted
the guidelines” for purposes of its § 3553(a) analysis. United
States v. Mix, 457 F.3d 906, 911 (9th Cir. 2006) (internal cita-
tions omitted). If the district court makes a material miscalcu-
lation in the advisory guidelines range, even after Booker, we
must vacate the sentence and remand for resentencing. United
States v. Cantrell, 433 F.3d 1269, 1280 (9th Cir. 2006).

   [7] Under the policy statement on departures for substantial
assistance to authorities, “[u]pon motion of the government
stating that the defendant has provided substantial assistance
in the investigation or prosecution of another person who has
committed an offense, the court may depart from the guide-
lines.” U.S.S.G. § 5K1.1.6 Here, the government moved for a
six-level downward departure under § 5K1.1 based on defen-
dant’s above-described cooperation. The district court
declined to make a departure on this basis in its advisory
guidelines calculation, explaining that “[t]he court feels on the
cooperation of the defendant, I don’t think that plays in the
guidelines. That is significant to the court’s discretion under
3553. But the guidelines, I have already told you what the
guidelines are on it.” As part of this § 3553(a) analysis, how-
ever, the district court reduced Zolp’s sentence by a full four
years.
   6
     In determining any appropriate reduction, the policy statement further
provides that the court may consider (1) the significance and usefulness
of the defendant’s assistance; (2) the “truthfulness, completeness, and reli-
ability” of the information provided; (3) the “nature and extent” of the
assistance, (4) any injury, danger, or risk to the defendant or his family
resulting from the assistance; and (5) the timeliness of the assistance.
U.S.S.G. § 5K1.1.
2988                 UNITED STATES v. ZOLP
    [8] The district court engaged in the correct analysis. In
United States v. Mohamed, 459 F.3d 979 (9th Cir. 2006), we
held that “the scheme of downward and upward ‘departures’
[is treated] as essentially replaced by the requirement that
judges impose a ‘reasonable’ sentence.” Id. at 986. Thus, “we
. . . review the district court’s application of the advisory sen-
tencing guidelines only insofar as they do not involve depar-
tures.” Id. at 987. While district courts may still consult the
Sentencing Commission’s considered judgment regarding the
basis for an appropriate deviation, “any post-Booker decision
to sentence outside of the applicable guidelines range is sub-
ject to a unitary review for reasonableness . . . .” Id. The dis-
trict court’s conclusion that it should consider Zolp’s
cooperation as a part of its analysis of the sentencing factors
set forth in 18 U.S.C. § 3553(a) rather than under the now
“anachronistic” departure regime, Mohamed, 459 F.3d at 987,
is consistent with our precedent.

                        CONCLUSION

  The district court’s factual finding that shares of New
Energy stock were “worthless” after the fraud came to light
was clearly erroneous; accordingly, we vacate the sentence
and remand for resentencing consistent with this opinion.

  VACATED AND REMANDED.
