This is a civil case brought by First Financial against its insurer, American Casualty, arising out of the actions of the bank's vice president, Farmigoni.
Farmigoni issued a letter of credit in the amount of $200,000 to another bank, First National. When First National later presented the letter of credit for payment, First Financial refused, on the basis that Farmigoni had fraudulently issued the letter of credit. First National then sued First Financial for dishonoring the letter of credit.
First Financial in turn sued Farmigoni for fraud, and American Casualty, which had issued a directors and officers liability insurance policy to First Financial, for failing to pay on the policy.
American Casualty's defense is that the insurance policy contained an exclusion from coverage for any losses "brought about by the dishonesty of the directors or officers" of the bank. In a parallel criminal prosecution, Farmigoni was indicted for fraud, and later entered a plea of nolo contendere to the charges.
At trial American Casualty intends to introduce evidence of Farmigoni's nolo contendere plea in the criminal case to prove that the policy exclusion applies. First Financial objects. At a hearing on the objection, the following happens:

1. Counsel, what's the basis for your objecting to Farmigoni's nolo plea?