Opinion ID: 32604
Heading Depth: 4
Heading Rank: 3

Heading: Tucker’s belief as to the nature of the

Text: certificates Much of Held’s proposed testimony centered on his “understanding from the facts that Mr. Tucker believed, and relied upon, advice from counsel and others that the trust certificates 29 The district court concluded that a weighing of the four family-resemblance factors “clearly indicate[d] that the certificates sold by FFAC were securities.” 30 United States v. Roberts, 887 F.2d at 536 (citations omitted). 16 involved were not securities, and therefore not regulated by the federal securities laws.”31 Tucker’s argument, boiled down, is that he cannot be charged with a criminal violation of § 77q(a) if he did not subjectively believe that the certificates were securities. We believe that Held’s testimony in this regard was nothing more than an attempt by Tucker to testify by proxy, that is, to elicit the aid of a so-called expert to expound on Tucker’s mental state and thereby avoid taking the witness stand and undergoing rigorous cross-examination. Further, with regard to Tucker’s belief concerning the nature of the certificates, the Ninth Circuit has explained that: the government is required to prove specific intent only as it relates to the action constituting the fraudulent, misleading or deceitful conduct, but not as to the knowledge that the instrument used is a security under the Securities Act. The government need only prove that the object sold or offered is, in fact, a security; it need not be proved that the defendant had specific knowledge that the object sold or offered was a security.32 Thus, by utilizing this view of specific intent, the Ninth Circuit reasoned that the Securities Exchange Act’s raison d’etre, to prevent a seller’s fraudulent behavior, was served rather than 31 Also in his written proffer, Held stated that he was prepared to testify that although he “did not provide Mr. Tucker with the original advice that the trust certificates were not securities, the law nonetheless supported the proposition.” 32 United States v. Brown, 578 F.2d 1280, 1284 (9th Cir. 1978); see also Buffo v. Graddick, 742 F.2d 592, 597 (11th Cir. 1984); Cook v. State, 824 S.W.2d 634, 637 (Tex. App.– Dallas 1991). 17 undermined.33 The focus is then necessarily on whether a defendant possessed the intent to defraud investors, his belief as to the nature of the certificates notwithstanding. By arguing that the certificates were not securities and therefore not subject to the anti-fraud provisions of the Securities Exchange Act of 1934, Tucker implicitly urges us to conclude that he was free to make whatever kind of representation he wanted to the potential investors, whether misleading or not. We flatly reject this reasoning and instead adopt the Ninth Circuit’s view that the defendant’s belief concerning the nature of the securities is irrelevant. Additionally, we find that Tucker’s efforts to elicit factual testimony through his expert were impermissible. Therefore, the district court properly excluded this portion of Held’s testimony.