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33 San Diego L. Rev. 1127 (1996)
Securities Fraud Prosecutions: Still Viable under California Securities Law after Simon

handle is hein.journals/sanlr33 and id is 1139 raw text is: Securities Fraud Prosecutions: Still Viable Under California Securities Law After Simon?* GEORGE A. CRAWFORD, NATALIE C. ROBERTS, AND SHAWN J. NELSON* In January 1995, the California Supreme Court issued an opinion that had the impact of a bombshell on California securities fraud prosecu- tions. In People v. Simon, California's Supreme Court overturned a Lutheran minister's criminal conviction for securities fraud.' The court based its decision on jury instructions it considered inappropriate. The instructions stated that neither guilty knowledge nor criminal intent * On April 3, 1996, the Honorable John G. Davies of the United States District Court of the Central District of California granted a writ of habeas corpus to Charles H. Keating, Jr., effectively overturning his conviction for violations of Corporations Code section 25401. Keating v. Hood, 922 F. Supp. 1482 (1996). Applying Simon to the instructions given the Keating jury, Judge Davies found a denial of due process in the failure to determine the appropriate intent required to convict the defendant as either a direct perpetrator or an aider and abettor. Id. at 1486, 1493. * George A. Crawford and Natalie C. Roberts are lawyers with the Enforcement Division of the California Department of Corporations. During preparation of this article, Shawn J. Nelson served as an intern with the Department of Corporations and was in his second year at Loyola Law School. The opinions stated herein are those of the authors and not necessarily those of the California Commissioner or the Department of Corporations. Appreciation is also expressed for the review and suggestions of Mr. Richard Lowenstein, Esq. of the Major Frauds Division for the Los Angeles County District Attorney's Office. 1. 9 Cal. 4th 493, 886 P.2d 1271, 37 Cal. Rptr. 2d 278 (1995). Noting that different jury instructions could have led to a finding that there had been a preexisting relationship sufficient to warrant an exemption, the court also overturned Simon's conviction for the sale of unqualified securities. 1127

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