State v. Chapman, 338 P.3d 230

Chapman acted as intermediary for two "hard money" loans between investor Sterling Madsen and borrower Dennis Rowley; one for $70,000 (100% stated interest) and another for $140,000.
Madsen relied on Chapman’s representations (including that Rowley could repay, that there was equity/collateral, and that Chapman had a document to secure the note); Chapman did not disclose he expected a $70,000 commission on the $70,000 loan (meaning Rowley actually agreed to pay 200% interest).
Rowley defaulted/vanished; Madsen received no repayment and discovered Chapman’s expected commission only after the loan.
The State charged Chapman with two counts of securities fraud under the Utah Uniform Securities Act; jury convicted Chapman on the $70,000 loan count and acquitted on the $140,000 loan count.
Chapman moved for directed verdicts arguing insufficiency of evidence on willfulness; he also challenged the admission of expert testimony (Michael Hines) as improperly offering legal conclusions on ultimate issues (e.g., what constitutes a security, materiality, and predicate statements).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Sufficiency — was there evidence of willfulness to send the directed verdict motion?	State: multiple omissions/misrepresentations (vouching for Rowley without investigation; failing to disclose $70,000 commission; misrepresenting existence/quality of collateral) could support willfulness.	Chapman: evidence of inexperience, friendship, and bad luck negates willfulness; no intent to deceive.	Court: Affirmed denial of directed verdict — viewed evidence in the light most favorable to State, jury could find Chapman acted willfully.
Admissibility of expert testimony — did Hines impermissibly give legal conclusions on ultimate issues (security, materiality, predicate statements)?	State: Hines’s generalized testimony explained industry practice and what investors consider important; admissible under Rules 702 and 704 to help the jury understand securities issues.	Chapman: Hines crossed the line by effectively telling the jury legal standards and tying opinions to Utah law, risking jury reliance on expert legal conclusions.	Court: Majority held trial court did not abuse discretion admitting Hines’s testimony (it was generalized and not a legal ruling); concurring judges expressed concern that some materiality testimony was unhelpful or impermissibly tied to law but found no prejudice or preserved error.

Brewer v. Denver & Rio Grande W. R.R., 31 P.3d 557 (Utah 2001) (standard for reversing denial of directed verdict for insufficiency of evidence)
State v. Larsen, 865 P.2d 1355 (Utah 1993) (expert testimony on securities issues may be admissible; limits on use of term “material”)
State v. Johnson, 224 P.3d 720 (Utah Ct. App. 2009) (trial court discretion on expert testimony; guidance on ultimate-issue testimony)
State v. Tenney, 913 P.2d 750 (Utah Ct. App. 1996) (expert testimony improperly tied opinions to legal standard of materiality)
State v. Davis, 155 P.3d 909 (Utah Ct. App. 2007) (no bright line between permissible ultimate-issue testimony and impermissible legal conclusions)
State v. Houskeeper, 62 P.3d 444 (Utah 2002) (admission of improper evidence requires showing of prejudice to warrant reversal)