Court Opinion

ID: 9462807
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:50:57.509454+00
Date Added: 2024-06-11T17:37:48.029708
License: Public Domain

LUMBARD, Circuit Judge
(concurring):
While I join in the result reached by the majority, I add this short statement to clarify my views concerning the impropriety of Dixon’s conviction for mail fraud, 18 U.S.C. § 1341. I believe that Judge Friendly somewhat overstates the case in his conclusion that appellant’s decision to mail incomplete and misleading proxies was unconnected to any “larger scheme contemplating pecuniary loss to someone or direct pecuniary gain to those who designed it,” ante p. 1399. To the contrary, it is clear from the record that the loans which Dixon received from AVM, and which he failed to disclose, were interest free. Since such favorable terms were presumably not available in the public financial markets, and since Dixon had unrestricted use of the money prior to its repayment, there can be no doubt that he profited in a very real sense from his access to corporate funds. That access was, however, fully authorized by the terms of the AVM charter which permitted its officers and directors to borrow from the corporation. To me, this is critical.
Certainly, the shareholders had every right to expect that appellant would reveal his activities to them. The Securities Act of 1934, moreover, required that he do so. But if we today construe the mail fraud statute to cover Dixon’s lack of forthrightness, it will tomorrow be available in every instance in which the proxy rules are technically violated. Such an expansive construction is neither required nor advisable.