Court Opinion

ID: 5059372
Source: CourtListenerOpinion
Date Created: 2021-10-01 09:06:47.542126+00
Date Added: 2024-06-11T08:19:21.731703
License: Public Domain

OPINION ON MOTION FOR REHEARING
In our original opinion on this matter, this court found the indictment fundamentally defective in its failure to properly set forth an offense under § 3 of the Blue Sky Law, Article 581-29(C), V.A.C.S. Both the State of Texas and appellant on appeal had expressly relied upon § 3 for their respective positions, and hence our ruling under its provisions. By motion and amended motion for rehearing, however, the State of Texas now urges propriety of the indictment by reliance upon § 1 of Article 581-29(C). Given these new circumstances, we have reviewed the indictment, statute and case law, and agree with appellee’s contentions. We withdraw our original opinion insofar as appellant’s third, fifth and sixth grounds of error were sustained, and here affirm the conviction.
Under Article 581-29(C), § 1 and § 3, it is an offense to:
In connection with the sale, offering for sale or delivery of, the purchase, offer to purchase, invitation of offers to purchase, invitations of offers to sell, or dealing in any other manner in any security or securities, whether or not the transaction or security is exempt under Section 5 or 6 of this Act, directly or indirectly (1) engage *425in any fraud or fraudulent practice, or ... (3) knowingly make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in the light of the circumstances under which they are made, not misleading . . . (emphasis added).
“Fraud” and “fraudulent practice” are, in pertinent part, defined under Article 581-4(F) as “an intentional failure to disclose a material fact.” The State elected to proceed on the fourth count of the indictment, which charged appellant with
willfully, fraudently, intentionally and knowingly failing to disclose that:
Proceeds from the sale of Can of Worms, Inc., debentures would be used to pay the creditors of Worm Enterprises, Inc.
and the said information being then and there well known by the said Noel Gene Weaver, and the said Noel Gene Weaver then and there intentionally failed to disclose said information for the purpose of inducing the said [complainant] to purchase said security and the said information being material fact.
While a ruling on the sufficiency of an indictment alleging fraud under the specific “failure to disclose a material fact” provision apparently has not been passed upon by our courts, it appears clear that the present indictment properly sets forth an offense under § 1 of Article 581-29(C). Other cases have upheld similar indictments for offenses under the other definitions of fraud and fraudulent practices. See Birchfield v. State, 401 S.W.2d 825 (Tex.Cr.App.1966); Shappley v. State, 520 S.W.2d 766 (Tex.Cr.App.1974).
Appellant’s remaining grounds of error having been overruled in our original opinion, the conviction is affirmed.