Thursday, November 7, 2013

United States v. Wolfson case brief

United States v. Wolfson case brief summary
405 F.2d 779, cert. denied 394 U.S. 946 (1968)

Defendants sought review of a judgment of a United States district court, which found in favor of plaintiff federal government in the government's action against defendants for failing to register the sale of securities as required by § 5 of the Securities Act of 1933, 15 U.S.C.S. § 77e.

Defendants sold large shares of stock for a corporation in which they were majority shareholders. They did not register the stock as required by statutory law. The government filed suit against them, and defendants contended that they had no idea during the period of the alleged conspiracy that there was any provision of law requiring registration of a security before its distribution by a controlling person to the public. They took the position at trial that they operated at a level of corporate finance far above such "details" as the securities laws and whether a particular stock had to be registered. Defendants asserted that they were much too busy with large affairs to concern themselves with such minor matters and attributed the fault of failure to register to subordinates. The jury found them guilty.

On appeal, the court, in affirming the judgment, determined that defendants' sale of shares was a distribution rather than an ordinary brokerage transaction, so that defendants were required to register the securities.


The court affirmed the district court's judgment.

Suggested Study Aids For Securities Regulation Law
Securities Regulation in a Nutshell, 10th (Nutshell Series)
Securities Regulation: Examples & Explanations, 5th Edition
Securities Regulations: The Essentials

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