as follows where the government proceeds prosecutes a crime onto legal theories and the jury returns a general verdict reversal is required if any of the legal theories fails as a matter of law and that's because the jury may have convicted the defendant for conduct that doesn't fall within the statutory definition of the crime and that's exactly what happened here the government argued securities fraud by means of misrepresentations and omissions also market manipulation but let's leave that aside for the moment so they argued two theories of securities fraud it was a general verdict but it's perfectly clear in my view that mr petrofsky owed no duty to disclose and so i don't understand how you conceive of this is two separate theories of he was making affirmative misrepresentations where the absence of additional information made the misleading why isn't that a deceptive device or what have you under ten p five why do you have to separate into it's only misrepresentations or only omissions it's the government that separated them the government never argued half truths which is what your honor is going to obviously the theory of fraud by half truths can apply under section ten b but the government never argued that they did the government now says they argued that but if you look at the record in the district court you'll see that they never did the indictment charges of fraud by omission failure to disclose the  the commissions that's paragraph eleven of the indictment but it was the misrepresentations that created the duty to disclose yes but that's a half truth argument which was never made and you can't argue a case you can't can you can't uphold a conviction on legal fees that wasn't presented to the jury the government argued repeatedly he's undisclosed commissions secret commissions he failed to disclose he told lies an e mail missions they never even used the word half truths and judge kogan charged the jury on misrepresentations and omissions he never used the word half truths in connection with the securities fraud claim count so i don't see how there can be a firm and on the ground that oh what the trustee really did was  make half truths they argued that now i put it in argue that to the jury your overall scheme here which involved claiming to investors that they had per personally invested and they failed to disclose their intent to sell their shares and the price was manipulated and they used nominees to buy and sell that overall scheme why isn't the failure to disclose a ten percent can you call it a commission the government argued in front of the jury that the most important thing that the trophy did the most important thing was to fail to disclose this commission and i just don't think the government can have this big lumping of distinct legal theories that the betrays model thinking based not for which a man is now in prison i mean those are distinct theories misrepresentations you could divide everything that was done here in two separate theories every point that the government is making that was  no reason to think anything otherwise five theories of what one was misrepresentation for involved omissions and the court said we cannot affirm this we cannot affirm in order to for appellants convictions to stand we must analyze the nature of the relationship between the brokers and their customers and determine whether the relationship gave rise to a duty to disclose the commissions that's what i'm asking you to hear what i'm asking is to exactly what the court didn't work with the government proceeds on theories of both omission the would be the conviction cannot stand unless there was a duty to disclose and again i don't think it's even disputed here there was no duty to disclose because mr petrofsky was simply giving speeches to matt mass you about a statement to be made relating to the government's argument really about half truths because look there are only three real theories right affirmative misrepresentations half truths and  laws where defendant omits to state means they don't state a material fact which means that was which means what was said under the circumstances is misleading that can support a verdict of guilty on the charge of securities fraud why is that not a statement about half truths and why and why where in scallions or in any other case that i'm familiar with have we required the government war for that matter a kogan didn't charge the jury on half truths now what what what what what what is a half truth you tell me after it is exactly what judge cornish said a statement that standing alone may be literally true but because of the non disclosure of other information becomes misleading because these are these are important legal distinctions and we have a man serving a prison sentence based on a theory that wasn't argued to the jury was submitted to the argued in front of the district court may i turn briefly now to the other issue that i'd like to raise which is the jury instruction on willfully right judge kogan rejected your or your suggestion yes i believe that there were two floors with the jury instructions one equates willfulness with intent to deceive or comes very close to that and that's an error and it was imbalanced because it just informed the jury what the government was not required to prove with respect to that's a big difference movements during a chart is a big difference between saying a jury instruction is not planar and a jury instruction is correct and here you have the novo review now it may explain why it can't possibly be correct with intent to deceive intent to deceive is an essential element of every ten b claim civil or criminal in order to elevate the conduct from civil that is money damages to criminal that is prison so willfulness usually is  usually as evidence by efforts to conceal and so on you know what you're doing is wrong why it why isn't it pretty clear here well that he knew what he was doing was wrong and you know intent to deceive ok deceive you know what you're doing is wrong because there has to be something more than intent to deceive in order to make this criminal and not just civil and what is that something more well i think you have to look at the bryant case in the supreme court which judge sand in his instructions works in brian says the general rule as a general matter when used in a criminal statute to go willfully means the government must prove that the defendant acted with knowledge that his conduct was unlawful knowledge that his conduct was unlawful not that he knew of a particular statute with knowledge that his conduct was generally on the awful thank you very much we'll hear from the other side it please the court mark beneath the united states i represent the united states in the district court and also in the proceedings in pennsylvania the government requests of the court to form the jury's convictions against a defendant on all counts and in all respects st with respect to securities fraud the district court properly found that atrocity security fraud conviction was based on a legally valid theory judge kogan address the same argument that's being brought here and says he said in particular in his ruling with respect to the defendant's application for bail pending appeal the defendant's argument regarding securities fraud he was referring to does not appear you appreciate either the evidence or the way the case was tried the government did not present a parallel alternative theories of liability for defendants conduct in promoting the sun see forcefield stock the emissions the defendant claims would have been insufficient to convict him were part of a greater fraud in which the defendant presented himself as a member of an independent investment research firm defendant's entire presentation which the evidence and trial showed he labored four times using similar content and remarks was designed to deceive investors into believing that he was providing independent advice he'd go so your adve reference the this theory of half truths which is principally where we are in addition to i think affirmative misrepresentations what's your response to that your honor i would note as your honour's had noted that this  half truths is a legal term of art it's a short form st for referring to misleading statements that violate tenby five and i would note that the usa who is gave every dealing with investors you have heard about over the course of this trial mr petrofsky told lies he told lies in big ways he told lies in small ways but all the lies he told have the convening effect of getting investors to put their money into sun city and your honor i would note that the government's comments in this regard go to element b of ten b five to make any untrue statement a material fact or to a minute to state a material fact necessary in order to make the statements made in light of the circumstances under which they were made not misleading and that's what a half truth statement is your honor and i would know that even the cases upon which defense counsel relies for example united states versus skelly for fo ninety four dollars specifically at page ninety seven notes that under ten b five under those provisions a seller or middleman may be liable for for fraud if he lies to the purchaser or tells him misleading have truths but not if he simply fails to disclose information that he is under no obligation to reveal because a registered representative is under no one herron duty to reveal his compensation otherwise truthful statements might made by him about the merits of particular investments are not transformed into misleading half truths simply by the brokers failure to reveal that he's receiving added compensation for promoting a particular investment so even the skelly case acknowledges half truths for making misleading statements in here the defendants entire presentation was misleading in for at least five  reasons st the wealth of research institute which was the defendant's purported company operated as a vehicle to make appear independent when he promoted the value of investing in force field referred to the wealth research institute in the plural using pronouns like we and our instead of i in his presentations claimed the mission of the wealth research institute was to quote help people identify investments to multiply wealth and buy them at a fair price and this is reflected in government's exhibit one hundred and three dollars and the general appendix at page sixty four the government's appendix i should say  paid sixty your honor this year honors i should say this presentation actually resonated with investors in fact some people speculated the wealth research institute had many employees there was a forcefield investor named nicholas ok so that's a bit too reality point but on the half truths you are saying that that was presented to the jury  certainly by way of the government's presentation as well as joint struction yes your honor with respect to the jury instruction i would know would note that the government or excuse me the jury instructions included regarding the securities fraud count that st in connection with the purchase or sale of a security the defendant did any one or more of three unlawful acts i'm going to call these going forward three unlawful acts they are as follows one employed to devise a scheme or artifice to defraud or to made an untrue statement the material fact amid to state the material fact which made what was said under the circumstances misleading that's the half truth portion your honor and then it goes on or the judge went on three engaged in an act practice or course of business that operated or would operate as a fraud or deceit upon a purchaser or seller in your honour's i would just note that that is how the government argued this case to the jury i would note your honor that while the instruction was not exactly the one the defendant requested it correctly followed the law on willfulness by telling the jury that willfully means to act knowingly and purposefully with an intent to do something that the law forbids in determining whether the government acted willfully the government is not required to establish that the defendant knew he was breaking any element your honor i would know while i agree that kaiser said that it was not an error i do think that your honour's pointing to kaiser is of some moment here because a media following this instruction was the instruction in the context of securities laws with the intent to defraud defraud it means to act knowingly and with an intent to deceive and i think that because it came right after the w purpose and so it's he simplified the instruction but he did state that to the jury also in this particular case there was no there was no doubt about willfulness i think the evidence in this regard was thank you your honors the counselor referred to the charge that the defendant requested but i think it's important to note that this was a charge that both the government and the defense requested both sides wanted that charge and then judge kogan watered it down counsel says he simplified it but i suggest to you that he took out some very important things he told the jury what the government was not required to prove with respect to patrol cities knowledge of the law but he did not tell the jury what the government was required to prove with respect to his knowledge of the law judge sent has its uniformly made this uniform eighty five years on after the one thousand nine hundred and thirty four act of still debating what the jury charges judge sand's charge which judge kogan refused to give is the tried and true method and brings uniformity to the cases and i suggest that the court should just stick with sand you can't tell a jury that the government's not required to prove his knowledge of a violation of a specific statute without also saying he is the government is required to show that he knew that his conduct was generally unlawful that's what brian says and it's actually what dixon says a very early differ from her from knowingly doing something purposefully that the law forbids because you can it's an awful here's why i think judge because you can't say that the jury can find somebody did something with a bad purpose to disobey or disregard the law unless you can also say that the government has to show that the defendant knew that his knew the law knew that his conduct was generally unlawful this comes from dixon judge friendly with their countenances looking down on us if these violations would have been prevented if the defendant had acted with the aim of scrupulously obeying the rules which would have necessarily involved correctly ascertain the rules you have to show the government has to show that the man defendant had some general knowledge about violating the law otherwise you can't have have intentionally disobeyed shop operations would be subject to  revision under these circumstances where people are just in there making all sorts of wild statements over the phone to get investors to do with vast and you know based upon the knowledge that they're pumping  that's that's that's the general knowledge that that that applies in all these get a lot of these cases i think there has to be i think you have to take brian into account but and the case couldn't stand him work more clearly willfully in general means the government must prove that the defendant acted with knowledge that his conduct was unlawful you might say generally unlawful because that's the way the case refers to it later thing that's unlawful is something that the law forbids right yes but basically the same thing that's what was charged i don't think it's the same thing because it did it and it's imbalanced your honor it's imbalanced by saying the government doesn't have to didn't have to prove the purchase he had knowledge of a specific law being violated without also michael brown corey canteen kerry vanderpool william bracy wendell bell and chase and mr moore is matters on submission so i would urge counsel to sit in order if possible of the presentation and let's proceed and also let the united states know the government know that although i have a lot of twenty five minutes they do not have to use all twenty five minutes ok