Free Proposed Jury Instructions - District Court of Colorado - Colorado

Case 1:04-cr-00103-REB-MEH

Document 1130-2

Filed 04/18/2007

Page 1 of 2

INSTRUCTION NO. Good faith reliance on counsel is a defense to the mens rea, (criminal intent), element of a criminal prosecution under the Securities Act of 1933. The government must prove that the defendant ''willllly violated" this Act's provisions. If the defendant relied in good faith on the advice of counsel, it may acquit him on the grounds that his conduct was not willful. In this regard the defendant must show a request for advice of counsel on the legality of the action, full disclosure of the relevant facts to counsel, receipt of advice from counsel that the action is legal, and reliance in good faith on that advice. As to fraudulent activities generally, such reliance is a complete defense not only as to legal effect, but also as to legal sufficiency of the facts furnished.

CIR. C.A., United States v. Wenger, 427 F.3d 840; 2005 U.S. App. LEXIS 23137; I oth Mevers v. Ideal Basic Industries. Inc., 940 F.2d 1379; 1991 U.S. App. LEXIS 17619; 1 oth CIR. C.A. 1991. 2005.

Case 1:04-cr-00103-REB-MEH

Document 1130-2

Filed 04/18/2007

Page 2 of 2

INSTRUCTION NO.
Registration of a security by an issuer, underwriter, or dealer is usually required when a public offering of securities is intended. However, there are well recognized exceptions to the general rule. For example, the following kinds of exceptions to registration of a securities offering exist by law as the rule of private placement:
(1)
(2)

Transactions by any person other than an issuer, underwriter, or dealer. Transactions by an issuer not involving any public offering.

Once an offering is asserted as a private placement and it is filed or otherwise possessed by the U.S. Securities and Exchange Commission, and there is objection to it, the Commission may enter an order temporarily suspending the private placement if it has any reason to believe it is not a valid private placement.

U.S. Securities Act of 1933, Section 4(1) and (2): Exempted transactions. And, 1933 Securities Act Rules, Rule 261, Suspension of Exemption.