256 Conn. 313 | Conn. | 2001
Opinion
The primary issue in this appeal is whether a defendant charged with selling unregistered securities under the criminal provisions of the Connecticut Uniform Securities Act (CUSA), now General Statutes §§ 36b-2 to 36b-33,
The record contains the following relevant facts. In early 1972, John Andresen and two associates formed a research and development company called Microbyx Corporation (Microbyx), which they incorporated in Delaware. Microbyx developed a specialized tampon-like device for collecting cells from menstrual fluid that, potentially, could be utilized for the early detection of cervical and endometrial cancers. Microbyx had planned to market the device as an easier and more reliable means of obtaining cell samples for cancer screening than the Pap smear test. To date, Microbyx has never marketed the device, never turned a profit, and has no employees, other than two officers.
The defendant married John Andresen in 1976 and began serving as corporate secretaiy and chief financial officer of Microbyx in 1984. Although the defendant had not become involved officially with Microbyx in a managerial capacity until that time, she had engaged in activities relating to its financing in 1981. After joining Microbyx, the defendant devoted the bulk of her time to the company and she and her husband conducted almost all of the business from their home in New Canaan. Sarles Associates, Inc. (Sarles Associates), an investment management and advising company that the defendant’s husband had formed and controlled, provided management services to Microbyx. Beginning in 1984, Microbyx paid Sarles Associates monthly fees ranging from $8000 to $15,000.
In 1983, after receiving a complaint from an investor who had purchased securities from the company, the department began investigating Microbyx. The department discovered that Microbyx securities were not registered in Connecticut and promptly issued to the defendant and her husband a cease and desist order to
In 1987, Microbyx filed an application with the department to register its securities by coordination.
In 1993, Microbyx filed another application with the department to register securities by qualification.
From 1990 to 1993, approximately ninety investors purchased securities from Microbyx, with the defendant or her husband listed on the stock certificates as the seller. At trial, several investors testified that the defendant and her husband had solicited their stock purchases and had represented to them that Microbyx had a patented, market-ready device approved by the federal Food and Drug Administration that would lead, to a public offering of Microbyx stock and returns on their investments. Many were novice investors, and some were given unpaid management positions with Microbyx after they had purchased the securities. The investors were not informed of the cease and desist order, nor were they informed that the device collected cell samples that were of little use in diagnosing cancer.
Between 1990 and 1994, investors poured $1.3 million into Microbyx while the company spent only $35,000 on research and development for the cell collection device. More than $1 million was funneled to the defen
The state charged the defendant in 1995 with five counts of securities fraud in violation of General Statutes (Rev. to 1995) § 36b-4 (2),
Before addressing the defendant’s claims, we note that state securities laws, or “blue sky laws,”
I
The defendant contends that the state failed to provide sufficient evidence to support a conviction for selling unregistered securities under § 36b-16. The defendant claims that the evidence at trial “clearly established that the transactions at issue were exempt from registration under the private placement exemption . . . .” See General Statutes (Rev. to 1995) § 36b-
II
The primary issue in this appeal is whether the trial court properly placed the burden of proving an exemption from registration on the defendant. The defendant contends that, because the trial court shifted the burden to her to prove that the securities or transactions were exempt, she was denied her constitutional right to due process under the fourteenth amendment to the United States constitution and article first, § 8, of the Connecticut constitution. See footnote 5 of this opinion. The defendant failed to object at trial and claims that this issue is reviewable under State v. Golding, supra, 213 Conn. 239-40 (defendant’s unpreserved claim will fail unless “[1] the record is adequate to review the alleged claim of error; [2] the claim is of constitutional magnitude alleging the violation of a fundamental right; [3] the alleged constitutional violation clearly exists and clearly deprived the defendant of a fair trial; and [4] if subject to harmless error analysis, the state has failed to demonstrate harmlessness of the alleged constitutional violation beyond a reasonable doubt”).
“The first two steps in the Golding analysis address the reviewability of the claim, while the last two steps involve the merits of the claim. State v. Beltran, 246 Conn. 268, 275, 717 A.2d 168 (1998).” (Internal quotation marks omitted.) State v. Henry, 253 Conn. 354, 359, 752 A.2d 40 (2000). In the absence of any one of the four Golding conditions, the defendant’s claim will fail. State v. Hafford, 252 Conn. 274, 305, 746 A.2d 150, cert. denied, 331 U.S. 855, 121 S. Ct. 136, 148 L. Ed. 2d 89
“[I]f we are persuaded that the merits of the defendant’s claim should be addressed, we will review it and arrive at a conclusion as to whether the alleged constitutional violation clearly exists and whether it clearly deprived the defendant of a fair trial.” Id., 241. We conclude that the defendant’s claim does not satisfy the third condition under Golding, because she has failed to establish a constitutional violation that clearly deprived her of a fair trial. See id.
“ ‘[T]he Due Process Clause protects the accused against conviction except upon proof beyond a reasonable doubt of every fact necessary to constitute the crime with which [she] is charged.’ In re Winship, 397 U.S. 358, 364, 90 S. Ct. 1068, 25 L. Ed. 2d 368 (1970).” State v. Valinski, 254 Conn. 107, 120, 756 A.2d 1250 (2000).
A
The defendant contends that, to support a conviction under § 36b-16, the state must prove beyond a reasonable doubt that the security, in addition to being sold or offered, was not registered and was not exempt from registration. Specifically, the defendant claims that an exemption from registration is nowhere “declare [d] ... to be an affirmative defense” by the legislature, and that, in accordance with General Statutes § 53a-12,
The state claims that the plain language of CUSA places on the defendant the burden of proving an
Whether an exemption from registration is an affirmative defense to the crime of selling unregistered securities requires us to construe provisions of CUSA. “Statutory construction is a question of law and therefore our review is plenary. . . . [O]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature. ... In seeking to discern that intent, we look to the words of the statute itself, to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement, and to its relationship to existing legislation and common law principles governing the same general subject matter.” (Citation omitted; internal quotation marks omitted.) State v. Murray, 254 Conn. 472, 487-88, 757 A.2d 578 (2000). On the basis of these factors, we conclude that an exemption from registration under CUSA is an affirmative defense to the charge of selling unregistered securities under § 36b-16.
The language of CUSA is clear. General Statutes (Rev. to 1995) § 36b-21 (d) provides that “[i]n any proceeding under sections 36b-2 to 36b-33, inclusive, the burden of proving an exemption or an exception from a definition is upon the person claiming it.” The defendant does not dispute that the reference to “sections 36b-2 to 36b-33, inclusive” includes § 36b-16, the statute that defines the prohibited conduct of which she was found guilty. (Emphasis added.) She claims, without citing any legal authority, that simply because § 36b-21 (d) is codified among the other provisions of CUSA, rather than in the Penal Code, it “applies only to civil or administrative proceedings, not criminal trials.” We are not persuaded.
In addition, the purpose of CUSA supports the conclusion that a defendant should bear, as an affirmative defense, the burden of proving that no registration was required for the offer or sale of the securities at issue. “[T]he primary purpose behind [CUSA] was to institute comprehensive registration requirements and thereby improve surveillance of securities trading.” Connecticut National Bank v. Giacomi, supra, 233 Conn. 320,
Moreover, because numerous, varied exemptions exist under General Statutes (Rev. to 1995) § 36b-21 (a)
B
Because an exemption is an affirmative defense to the crime of selling unregistered securities, the question devolves to whether requiring the defendant to bear the burden of proving the existence of an applicable exemption by a preponderance of the evidence passes constitutional muster. See State v. Valinski, supra, 254 Conn. 129-30. “The proper approach to resolving this question, as dictated by Patterson [v. New York, supra, 432 U.S. 210], is first to determine the elements of [the offense of selling unregistered securities], and second to determine whether the defense [that the securities were exempt from registration] necessarily negates any of those elements. White v. Arn, 788 F.2d 338, 343-44, (6th Cir. 1986), cert. denied, 480 U.S. 917, 107 S. Ct. 1370, 94 L. Ed. 2d 686 (1987).” (Internal quotation marks omitted.) State v. Valinski, supra, 129-30.
A conviction under § 36b~16 requires proof that the defendant (1) sold or offered a security in this state, and (2) that the security is not registered under §§ 36b-2 through 36b-33, inclusive. If we were to agree with
It is equally clear that the availability of an exemption from registration does not negate any of the essential elements of the crime of selling unregistered securities. An unregistered security or transaction that qualifies for one of the statutory exemptions enumerated in § 36b-21, and may be offered or sold in Connecticut because of its exempt status, is still an unregistered security. The mere fact that an issuer may legally sell such a security does not transform an otherwise unregistered security into one that is registered under CUSA. See State v. Frost, 57 Ohio St. 2d 121, 127, 387 N.E.2d 235 (1979) (not unconstitutional to require defendant to carry burden of
Decisions from other jurisdictions addressing the crime of selling unregistered securities under the Uniform Act or similar provisions of state blue sky laws consistently have placed the burden on the defendant to prove an exemption. See, e.g., United States ex rel. Shott v. Tehan, supra, 365 F.2d 194; State v. Goodman, 110 Ariz. 524, 526, 521 P.2d 611 (1974); Hunter v. State, supra, 330 Ark. 201-202; State v. Kershner, supra, 801 P.2d 70; Commonwealth v. David, 365 Mass. 47, 53-54, 309 N.E.2d 484 (1974); People v. Dempster, 396 Mich. 700, 713-14, 242 N.W.2d 381 (1976); Fullerton v. State, 116 Nev. , 8 P.3d 848, 850 (2000); State v. Goetz, supra, 312 N.W.2d 9-10; State v. Frost, supra, 57 Ohio St. 2d 127; State v. Shepherd, 989 P.2d 503, 509 (Utah App. 1999); cf. People v. Morrow, supra, 682 P.2d 1207 (“ [o]nce the prosecution raised the issue of [the applicability of an exemption as an] affirmative defense, it assumed the burden of proving beyond a reasonable doubt that the affirmative defense was not applicable”); accord Securities & Exchange Commission v. Ralston Purina Co., 346 U.S. 119, 126, 73 S. Ct. 981, 97 L. Ed. 1494 (1953) (imposition of burden of proof on issuer of securities seeking to utilize exemption is “fair and reasonable” because of “broadly remedial purposes of federal securities legislation”).
Accordingly, we conclude that the existence and applicability of an exemption does not “serve to negate any essential element of the crime which the state has the burden of proving beyond a reasonable doubt in order to convict”; State v. Arroyo, supra, 181 Conn. 430; and that requiring the defendant to bear the burden of proof, by a preponderance of the evidence, with respect to the affirmative defense of an exemption from regis
III
The defendant next claims that the trial court improperly admitted into evidence the cease and desist order that the department had issued against the defendant and her husband. The defendant contends that the cease and desist order “was neither relevant nor material” and its admission “prejudiced [her] by diverting attention from the actual issues in the case . . . [specifically] whether or not § 36b-16 [had been] violated.” The defendant concedes that the evidence was admitted without objection, but seeks review under the plain error rule of Practice Book § 60-5. See footnote 15 of this opinion.
“Plain error review is reserved for truly extraordinary situations where the existence of the error is so obvious that it affects the fairness and integrity of and public confidence in the judicial proceedings. . . . Westport Taxi Service, Inc. v. Westport Transit District, 235 Conn. 1, 25, 664 A.2d 719 (1995).” (Internal quotation marks omitted.) State v. Taylor, supra, 239 Conn. 502. We detect no impropriety in the trial court’s admission of the cease and desist order.
“Relevant evidence is evidence that has a logical tendency to aid the trier in the determination of an issue. . . . [E]vidence need not exclude all other possibilities [to be relevant]; it is sufficient if it tends to support the
In this case, the defendant was charged with five counts of selling unregistered securities in violation of § 36b-16, as well as five counts of securities fraud in violation of § 36b-4 (2). See footnote 10 of this opinion. Several witnesses testified that the defendant had not informed them of the existence of the department’s cease and desist order in connection with their purchases of Microbyx securities. In addition, the 1993 prospectus submitted by Microbyx to the department in conjunction with its efforts to register its securities did not mention the cease and desist order, as did the 1987 submission. See footnote 9 of this opinion. Thus, evidence of the cease and desist order was both relevant and material to the question of whether the defendant had violated § 36b-4 (2). The defendant has offered no compelling argument that suggests that she was unduly prejudiced by its admission for that purpose. Likewise, she does not argue, nor could she persuasively, that her acquittal on the fraud charges rendered the evidence improper. Accordingly, the defendant’s claim that the trial court’s admission of the cease and desist order amounts to plain error is without merit.
Finally, the defendant argues that because she reasonably relied on the advice of legal counsel in selling unregistered Microbyx securities, her convictions under § 36b-16 cannot stand. The defendant contends that she lacked “intent to violate the law” because she acted reasonably in relying on the advice of her lawyers. The state argues that § 36b-16 requires no specific intent to violate the law, but that it is a “strict liability” offense and that advice of counsel is “not a legitimate defense to the sale of unregistered securities . . . .” At oral argument before this court, the defendant conceded that, if a violation of § 36b-16 is in the nature of strict liability, requiring no specific intent to violate the law, then her claim regarding reliance on the advice of counsel “goes out the window.”
“Whether or not a statutory crime requires mens rea or scienter as an element of the offense is largely a question of legislative intent to be determined from the general scope of the act and from the nature of the evils to be avoided.” (Internal quotation marks omitted.) State v. Swain, 245 Conn. 442, 454, 718 A.2d 1 (1998). In State v. Kreminski, supra, 178 Conn. 145, this court reviewed a conviction under the Connecticut Securities Act, the predecessor to CUSA. In that case, the defendant argued that “the requirement of mens rea or evil intention should be effectively read into the statute.” Id., 147. This court noted that “[p]ersonal blame on the part of the actor, except in the general sense that he should have known better or exercised a greater degree
As noted previously, the criminal provisions of CUSA; General Statutes § 36b-28; prohibit “wilful” violations thereof. See State v. Kreminski, supra, 178 Conn. 152 (noting that CUSA requires wilful violations); see also footnote 12 of this opinion. The issue in this case is whether “wilfully” as used in § 36b-28 requires that the defendant both wilfully engaged in prohibited conduct—that, is, she wilfully sold unregistered securities— and, in so doing, maintained specific intent to violate the law. We conclude that wilfully violating provisions of the Uniform Act, and therefore CUSA, requires “proof that the person acted intentionally in the sense that [she] was aware of what [she] was doing. Proof of evil motive or intent to violate the law, or knowledge that the law was being violated, is not required.” L. Loss, Commentary on the Uniform Securities Act (1976) § 204 (a) (2) (B), official comment, p. 29;
Although CUSA requires wilful conduct, wilfulness does not always amount to specific intent. “[W]illful is a word of many meanings, its construction often being influenced by its context. Screws v. United States, 325 U.S. 91, 101, 65 S. Ct. 1031, 89 L. Ed. 1495 (1943).” (Internal quotation marks omitted.) In re Flanagan,
“When the elements of a crime consist of a description of a particular act and a mental element not specific in nature, the only issue is whether the defendant intended to do the proscribed act. If [she] did so intend, [she] has the requisite general intent for culpability.” (Internal quotation marks omitted.) State v. McClary, 207 Conn. 233, 240, 541 A.2d 96 (1988). “Intent to do the prohibited act, not intent to violate the criminal law, is the only intent requisite for conviction in the case of many crimes constituting violations of statutes in the nature of police regulations.” (Internal quotation
We hold, as have the overwhelming majority of jurisdictions, that the offense of wilfully selling unregistered securities requires proof only that the defendant intended to do the act prohibited by the statute. See, e.g., Bayhi v. State, 629 So. 2d 782, 789 (Ala. App.), cert. denied, 629 So. 2d 782 (Ala. 1993); People v. Clem, supra, 39 Cal. App. 3d 542; People v. Terranova, supra, 38 Colo. App. 482; State v. Montgomery, 135 Idaho 348, 350-52, 17 P.3d 292 (2001); Clarkson v. State, 486 N.E.2d 501, 506-507 (Ind. 1985); State v. Kershner, supra, 801 P.2d 70-71; State v. Dumke, 901 S.W.2d 100, 103 (Mo. App. 1995); State v. Irons, 254 Neb. 18, 23-24, 574 N.W.2d 144 (1998); State v. Russell, 119 N.J. Super. 344, 351, 291 A.2d 583 (1972); State v. Sheets, 94 N.M. 356, 365, 610 P.2d 760 (App.), cert. denied, 94 N.M. 356, 610 P.2d 760 (1980); State v. Goetz, supra, 312 N.W.2d 12-13; State v. Cox, 17 Wash. App. 896, 903, 566 P.2d 935 (1977), cert. denied, 439 U.S. 823, 99 S. Ct. 90, 58 L. Ed. 2d 115 (1978).
The judgment is affirmed.
In this opinion the other justices concurred.
Because the transactions that formed the basis of the charges against the defendant in this case occurred between 1991 and 1993, they were governed by the provisions of CUSA as they existed as early as the 1991 revision of the General Statutes. See General Statutes (Rev. to 1991) § 36-470 et seq. In 1995, CUSA was transferred from §§ 36-470 through 36-502 to §§ 36b-2 through 36b-33 of the General Statutes, with only minor technical changes not relevant here having occurred to some of the provisions. For purposes of clarity, we refer herein to the statutes as codified in the 1995 revision of the statutes as they existed at the time the defendant was charged.
At the time that the events in this case transpired, the defendant was married to John Andresen, who died in 1996. She has since remarried and is now known as Constance Tanter. All references herein to the defendant’s husband are to John Andresen.
General Statutes (Rev. to 1995) § 36b-16 provides: “No person shall offer or sell any security in this state unless (1) it is registered under sections 36b-2 to 36b-33, inclusive, or (2) the security or transaction is exempted under section 36b-21.”
General Statutes (Rev. to 1995) § 36b-21 provides exemptions from the registration requirements, with subsection (a) exempting twenty-one specific types of securities; see footnote 21 of this opinion; and subsection (b) exempting fifteen specific transactions. General Statutes (Rev. to 1995) § 36b-21 (b) provides: “The following transactions are exempted from sections 36b-16 and 36b-22: (1) Any isolated nonissuer transaction, whether effected through a broker-dealer or not; (2) any nonissuer distribution of an outstanding security if (A) a recognized securities manual contains the names of the issuer’s officers and directors, a balance sheet of the issuer as of a date within eighteen months, and a profit and loss statement for either the fiscal year preceding that date or the most recent year of operations, except that the exemption shall not be available for any distribution of securities issued by a blank check company, shell company, dormant company or any issuer that has been merged or consolidated with or has bought out a blank check company, shell company or dormant company or (B) the security has a fixed maturity or a fixed interest or dividend provision and there has been no default during the current fiscal year or within the three preceding fiscal years, or during the existence of the issuer and any predecessors if less than three years, in the payment of principal, interest, or dividends on the security; (3) any nonissuer transaction effected by or through a registered broker-dealer pursuant to an unsolicited order or offer to buy; but the commissioner may by regulation require that the customer acknowledge upon a specified form that the sale was unsolicited, and that a signed copy of each such form be preserved by the broker-dealer for a specified period or that the confirmation delivered to the purchaser or a memorandum delivered in connection therewith shall confirm that such purchase was unsolicited by the broker-dealer or any agent of the broker-dealer; (4) any transaction between the issuer or other person on whose behalf the offering is made and an underwriter, or among underwriters; (5) any transaction in a bond or other evidence of indebtedness secured by a
General Statutes (Rev. to 1995) § 36b-21 (b) provides in relevant part: “(9)(A) [SJubject to the provisions of this subdivision, any transaction not involving a public offering within the meaning of Section 4(2) of the Securities Act of 1933, as amended, and the rules and regulations thereunder;
The due process clause of the fourteenth amendment to the United States constitution provides in relevant part: “No State shall . . . deprive any person of life, liberty or property, without due process of law . . . .” Article first, § 8, of the Connecticut constitution provides in part: “No person shall be compelled to give evidence against himself, nor be deprived of life, liberty or property without due process of law . . . .”
Although we note that “ ‘[t]he due process provisions of the state and federal constitutions generally have the same meaning and impose similar constitutional limitations’ Ghant v. Commissioner of Correction, 255 Conn. 1, 18 n.16, 761 A.2d 740 (2000); in this case, “[t]he defendant has not offered any independent and adequate analysis under the state constitution. We therefore confine our analysis to [her] claims under the federal constitution. State v. Beltran, 246 Conn. 268, 277 n.7, 717 A.2d 168 (1998); State v. Porter, 241 Conn. 57, 133 n.77, 698 A.2d 739 (1997), cert. denied, 523 U.S. 1058, 118 S. Ct. 1384, 140 L. Ed. 2d 645 (1998).” State v. Heredia, 253 Conn. 543, 550 n.10, 754 A.2d 114 (2000).
The original cease and desist order dated January 12, 1984, which was made permanent by the department on March 19, 1985, provided: “The [c]ommissioner [of the department] therefore orders that [John Andresen and Constance Andresen] cease and desist from any offer or sale of securities in or from Connecticut.” A subsequent appeal of the 1985 order was dismissed by the Superior Court on August 15, 1986.
“Any security for which a registration statement has been filed under the Securities Act of 1933 in connection with the same offering may be registered [in Connecticut] by coordination.” General Statutes § 36b-17 (a). “In essence, the coordination procedure requires filing at the state level copies of the registration statement filed with the [Securities Exchange Commission] as well as amendments. The [state] securities administrator may require the filing of other documents . . . such as the articles of incorporation or the agreement among underwriters. If specific conditions are met, the registration statement automatically becomes effective at the state level at the moment the federal registration becomes effective.” 1 L. Loss & J. Seligman, Securities Regulation (3d Ed. 1989) p. 103; see also General Statutes § 36b-17 (c); Regs., Conn. State Agencies § 36b-31-17a.
“Any security may be registered [in Connecticut] by qualification.” General Statutes § 36b-18 (a). “The full type of registration is called registration by ‘qualification.’ This procedure must be used when no other procedure is available and may be used in any case.” 1L. Loss & J. Seligman, Securities Regulation (3d Ed. 1989) pp. 104-105; see General Statutes § 36b-18 (b) (listing information and documents required for registration by qualification). Registration by qualification “becomes effective when the commis
The department did not permit the withdrawal because the prospectus submitted in conned ion with the 1993 application for registration by qualification had omitted information that the 1987 application had contained. Specifically, the 1993 prospectus deleted information that the cell collection device was considered by members of the medical community as capable of procuring only cell samples “of little or no diagnostic value.” Likewise, the 1993 prospectus failed to mention the permanent 1985 cease and desist order.
General Statutes (Rev. to 1995) § 36b-4 provides: “No person shall, in connection with the offer, sale or purchase of any security, directly or indirectly: (1) Employ any device, scheme or artifice to defraud; (2) malee any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or (3) engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.”
See footnote 3 of this opinion for the text of § 36b-16.
General Statutes § 36b-28 (b)provides: “Anypersonwho wilfully violates any other provision of sections 36b-2 to 36b-33, inclusive, shall be fined not more than two thousand dollars or imprisoned for not more than two years or both.”
The term “blue sky law first came into general use to describe legislation aimed at promoters who would sell building lots in the blue sky in fee simple.” (Internal quotation marks omitted.) 1 L. Loss & J. Seligman, Securities Regulation (3d Ed. 1989) p. 34; see also Hall v. Geiger-Jones Co., 242 U.S. 539, 550, 37 S. Ct. 217, 61 L. Ed. 480 (1917) (upholding constitutionality of state securities regulations that targeted “speculative schemes which have no more basis than so many feet of blue sky”); cf. J. Macey & G. Miller, “Origin of the Blue Sky Laws,” 70 Tex. L. Rev. 347, 359-60 n.59 (1991) (discussing origin of term and suggesting that it was borrowed from other
See footnote 4 of this opinion for the text of § 36b-21 (b) (9).
Practice Book § 60-5 provides in relevant part: “The court may reverse or modify the decision of the trial court if it determines that the factual findings are clearly erroneous in view of the evidence and pleadings in the whole record, or that the decision is otherwise erroneous in law.
“The court shall not be bound to consider a claim unless it was distinctly raised at the trial or arose subsequent to the trial. The court may in the interests of justice notice plain error not brought to the attention of the trial court. . . .
“If the court deems it necessary to the proper disposition of the cause, it may remand the case for a further articulation of the basis of the trial court’s factual findings or decision.
“It is the responsibility of the appellant to provide an adequate record for review as provided in Section 61-10.”
At trial, the defendant contended that the securities qualified for the ten purchaser exemption under § 36b-21 (b) (14). See footnote 3 of this opinion. At sentencing, some two and one-half months following the judgment of conviction, the defendant candidly acknowledged that “there may have been an applicable exemption [that] none of us seemed to identify or examine properly” at trial. We note that the applicability of any of the statutory exemptions in § 36b-21 is a question of fact; see People v. Morrow, 682 P.2d 1201, 1206 (Colo. App. 1983), cert. denied, 682 P.2d 1201 (Colo. 1984) (availability of statutory exemption is question of fact); and that the trial court made no findings regarding the private placement exemption. See footnote 4 of this opinion. Therefore, we are unable to review this claim on appeal. State v. Mukhtaar, 253 Conn. 280, 290, 750 A.2d 1059 (2000) (issues of fact raised for first time on appeal not reviewable).
Before this court, the defendant contends, nonetheless, that the testimony of her expert witness, a securities lawyer not admitted to practice in Connecticut, sufficiently proved that the sales of Microbyx stock were exempt from registration under the private placement exemption, rather than the ten purchaser exemption that had been alleged at trial. Our review of that
The defendant contends that this court may not rely on State v. Valinski, supra, 254 Conn. 107, because it was decided one year after her trial in this case. Valinski concerned the issue of whether possession of a work permit allowing limited use of a motor vehicle constituted an affirmative defense to operating a motor vehicle with a suspended license; id., 121; rather than an exemption for selling unregistered securities, and our decision in this
General Statutes § 53a-12 provides: “(a) When a defense other than an affirmative defense, is raised at a trial, the state shall have the burden of disproving such defense beyond a reasonable doubt.
“(b) When a defense declared to be an affirmative defense is raised at a trial, the defendant shall have the burden of establishing such defense by a preponderance of the evidence.”
General Statutes § 53a-2 provides in relevant part that “[t]he provisions of [the Penal Code] shall apply to any offense defined in this title or the general statutes, unless otherwise expressly provided or unless the context otherwise requires . . .
Although nothing in the legislative history addresses specifically the burden of proof for establishing an exemption from registration, the official commentary to § 402 (d) of the Uniform Act indicates that it simply “codiñes existing law.” L. Loss, Commentary on the Uniform Securities Act (1976) § 402 (d), official comment, p. 137; see also Connecticut National Bank v. Giacomi, supra, 233 Conn. 320 (noting that this court “may be assisted in ascertaining [legislative] intent by looking to the commentaries on the meaning of [the Uniform Act]”).
General Statutes (Rev. to 1995) § 36b-21 (a) provides: “The following securities are exempted from sections 36b-16 and 36b-22: (1) Any security including a revenue obligation issued or guaranteed by the United States, any state, any political subdivision of a state, or any agency or corporate or other instrumentality of one or more of the foregoing; or any certificate of deposit for any of the foregoing; (2) any security issued or guaranteed by Canada, any Canadian province, any political subdivision of any such province, any agency or coiporate or other instrumentality of one or more of the foregoing, or any other foreign government with which the United States currently maintains diplomatic relations, if the security is recognized as a valid obligation by the issuer or guarantor; (3) any security issued by and representing an interest in or a debt of, or guaranteed by, any bank organized under the laws of the United States, or any bank, savings institution, or trust company organized and supervised under the laws of any state; (4) any security issued by and representing an interest in or a debt of, or guaranteed by, any federal savings and loan association, or any savings and loan or similar association organized under the laws of any state; (5) any security issued by and representing an interest in or a debt of, or guaranteed by, any insurance company organized under the laws of any state and authorized to do business in this state; (6) any security issued or guaranteed by any federal credit union or any credit union, industrial loan association, or similar association organized and supervised under the laws of this state; (7) any security issued or guaranteed by any railroad, other common carrier, public utility, or holding company which is (A) subject to the jurisdiction of the Interstate Commerce Commission; (B) a registered holding company under the Public Utility Holding Company Act of 1935 or a subsidiary of
See footnote 3 of this opinion for the text of § 36b-21 (b).
The defendant also raised for the first time in her reply brief what is essentially a notice issue. See, e.g., State v. Johnson, 253 Conn. 1, 35-40, 751 A.2d 298 (2000) (discussing notice of elements of crime charged in plea agreement context). She claims that if this court were to decide that an exemption from registration is an affirmative defense, we could apply that determination only prospectively because it would amount to a substantive change in the law.
Although we need not decide this issue; see State v. Garvin, 242 Conn. 296, 312, 699 A.2d 921 (1997) (“ ‘the function of the appellant’s reply brief is to respond to the arguments and authority presented in the appellee’s brief . . . [and] that function does not include raising an entirely new claim’ ”); we nevertheless reject it because the provision of the Uniform Act placing the burden of proving an exemption on the party claiming it, which was in effect at the time of the defendant’s conduct, and at the time of her trial, simply codified existing law. See footnote 20 of this opinion.
Once the defendant satisfies his or her burden of persuasion regarding an exemption from registration, the burden shifts to the state to prove beyond a reasonable doubt that that particular exemption does not apply. See, e.g., Commonwealth v. David, supra, 365 Mass. 53-54; People v. Dempster, supra, 396 Mich. 713-14; Fullerton v. State, supra, 8 P.3d 850.
The defendant also claims that “[t]he record is ambiguous” as to whether the trial court relied on the defendant’s violation of the cease and desist order as a basis for the conviction under § 36b-16. As explained previously, the cease and desist order was relevant to the fraud charges. To the extent that the defendant contends that ambiguity in the record requires reversal of her conviction under § 36b-16, we note that she was required to provide, in accordance with Practice Book § CO-5, an adequate record for review.
We note that the official comment to § 409 of the Uniform Act, the criminal provision requiring wilful violations, refers to the official comment under § 204 (a) (2) (B) for the meaning of the word wilfully. L. Loss, supra, § 409, official comment, p. 144.
The defendant cites no authority for the proposition that a conviction under § 36b-16 for selling unregistered securities requires specific intent to violate the law. Our research has revealed only one such case. See Hentzner v. State, 613 P.2d 821, 825-27 (Alaska 1980) (consciousness of wrongdoing required as separate element for conviction of selling unregistered securities; requires more than awareness of act but less than knowledge of illegality). At least one recent case characterized the Hentzner decision as “an aberration.” See State v. Dumke, supra, 901 S.W.2d 104; see also State v. Mueller, 201 Wis. 2d 121, 134-35 n.3, 549 N.W.2d 455 (App. 1996) (noting apparent divergence of authority and no need to “enter the debate” concerning mental
We assume for purposes of this appeal that the reasonable, good faith reliance on the advice of counsel, like intoxication, could, in some circumstances, negate specific intent and thereby negate a required element of the crime charged. See, e.g., State v. Austin, 244 Conn. 226, 239, 710 A.2d 732 (1998) (noting that “ ‘evidence of a defendant’s intoxication is relevant to negate specific intent which is an essential element of the crime of murder’ ”). Because a conviction under § 36b-16 requires only general intent, the defendant’s argument must fail. See State v. Smith, 210 Conn. 132, 138, 554 A.2d 713 (1989) (noting that intoxication “is generally held to be relevant to negate a crime of specific intent but not a crime of general intent”).
We emphasize that this court has never applied the advice of counsel “defense” in such a manner, and we express no opinion on the viability of such a claim in other circumstances. See Lurie v. Wittner, 228 F.3d 113, 134 (2d Cir. 2000) (noting that “[t]here is no [United States] Supreme Court precedent requiring that an advice-of-counsel defense be allowed in state court; indeed, the situations in which the advice-of-counsel defense may be employed are severely limited”); but see Ratzlaf v. United States, 510 U.S. 135, 142 n.10, 114 S. Ct. 655, 126 L. Ed. 2d 615 (1994) (noting that specific intent to commit crimes defined in anti-structuring statutes might be negated by proof that defendant relied in good faith on advice of counsel).