Download security fraud - Harris County District Courts

CAUSE NO. «CAUSENO»
THE STATE OF TEXAS
§
IN THE «COURTNO» DISTRICT COURT
VS.
§
OF HARRIS COUNTY, TEXAS
«DEFENDANT»
§
«MONTH» TERM, A. D., «YEAR»
Members of the Jury:
Our
statutes
provide
that
it
shall
be
unlawful
for
any
person, either directly or indirectly, to engage in any fraud or
fraudulent practice in connection with the sale, offering for
sale, delivery, invitation of offers to sell, or dealing in any
other manner in any security or securities, whether or not the
transaction or security is exempt from registration under the
Texas Securities Act.
The
terms
"fraud"
or
"fraudulent
practice"
intentional failure to disclose a material fact.
includes
an
An omitted fact
is "material" if there is a substantial likelihood that it would
have
assumed
actual
significance
in
the
deliberations
of
a
reasonable investor, in that it would have been viewed by the
reasonable investor as significantly altering the total mix of
available information used in deciding whether to invest.
The term "security" or "securities" shall include any limited
partner interest in a limited partnership, share, stock, treasury
stock,
stock
collateral
certificate
trust
preorganization
reorganization
under
certificate,
certificate
certificate,
a
voting
equipment
or
note,
trust
receipt,
bond,
trust
agreement,
certificate,
subscription
debenture,
or
mortgage
certificate
or
other
evidence
of
indebtedness,
any
form
of
commercial paper, certificate in or under a profit sharing or
participation
agreement,
certificate
or
any
instrument
representing any interest in or under an oil, gas or mining
lease,
fee
or
title,
or
any
certificate
or
instrument
representing or secured by an interest in any or all of the
capital, property, assets, profits or earnings of any company,
investment contract, or any other instrument commonly known as a
security, whether similar to those herein referred to or not. The
term applies regardless of whether the "security" or "securities"
are evidenced by a written instrument. Provided, however, that
this
definition
shall
not
apply
to
any
insurance
policy,
endowment policy, annuity contract, optional annuity contract, or
any contract or agreement in relation to and in consequence of
any such policy or contract, issued by an insurance company
subject to the supervision or control of the Texas Department of
Insurance when the form of such policy or contract has been duly
filed with the Department as required by law.
The terms "sale" or "offer for sale" or "sell" shall include
every disposition, or attempt to dispose, of a security for
value.
The
term
"sale"
means
and
includes
contracts
and
agreements whereby securities are sold, traded or exchanged for
money, property or other things of value, or any transfer or
agreement to transfer, in trust or otherwise.
Any security given
or delivered with or as a bonus on account of any purchase of
securities
or
other
thing
of
value,
shall
be
conclusively
presumed to constitute a part of the subject of such purchase and
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to have been sold for value.
The term "sell" means any act by
which a sale is made, and the term "sale" or "offer for sale"
shall include a subscription, an option for sale, a solicitation
of sale, an attempt to sell, or an offer to sell, directly or by
an agent or salesman, by a circular, letter, or advertisement or
otherwise, including the deposit in a United States Post Office
or mail box or in any manner in the United States mails within
this State of a letter, circular or other advertising matter.
A person acts intentionally, or with intent, with respect to
the nature of his conduct or to a result of his conduct when it
is his conscious objective or desire to engage in the conduct or
cause the result.
This State has jurisdiction over an offense that a person
commits by his own conduct if either the conduct or a result that
is an element of the conduct occurs inside this State.
All persons are parties to an offense who are guilty of
acting together in the commission of the offense.
A person is
criminally responsible as a party to an offense if the offense is
committed by his own conduct, by the conduct of another for which
he is criminally responsible, or by both.
A person is criminally responsible for an offense committed
by the conduct of another if, acting with the kind of culpability
required for the offense, he causes or aids an innocent or nonresponsible
person
to
engage
in
conduct
prohibited
by
the
definition of the offense, or acting with intent to promote or
assist the commission of the offense, he solicits, encourages,
directs, aids, or attempts to aid the other person to commit the
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offense.
Mere presence alone will not constitute one a party to
an offense.
Now
therefore,
reasonable
doubt
if
you
that
find
from
heretofore
on
the
or
evidence
about
beyond
various
a
dates
between February 15, 1994 and July 25, 1994, in Harris County,
Texas,
the
defendant,
«DEFENDANT1»,
acting
alone
or
with
(PARTIES) as a party to the offense, as that term is hereinbefore
defined,
did
then
and
there
unlawfully,
or
intentionally,
pursuant to one scheme and continuing course of conduct, directly
or indirectly, offer for sale, and/or sell securities, namely, a
subordinated debenture issued by The Murchison Group, Inc., to
(COMPLAINANTS),
who
are
hereafter
referred
to
as
the
complainants, and did obtain money in an aggregate amount of one
hundred thousand dollars or more from the sale of said securities
to the above complainants, and the defendant did then and there
directly or indirectly engage in fraud by intentionally failing
to disclose to the complainants the following material fact or
facts which was/were known to the defendant and the defendant
intentionally
failed
to
disclose
said
fact
or
facts
to
the
complainants for the purpose of inducing the complainants to
purchase the said securities;
(1) That Hurst-Murchison Corporation, an affiliated entity of Murchison Group,
Inc., and its predecessor in interest, had previously sold approximately
$450,000.00 of similar subordinated debentures in 1992, and the defendant
had
directly
and/or
indirectly
represented
to
the
1992
debenture
purchasers that the 1992 debentures were collateralized or secured by
United States Treasury Notes, when in fact only approximately $300,000.00
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in Treasury Notes were purchased or acquired to collateralize or secure
the investments of the 1992 debenture purchasers, and said Treasury Notes
were sold in approximately July of 1993, and that the revenues from the
sale of 1992 subordinated debentures, and from the subsequent sale in
approximately
July
of
1993
of
the
approximate
$300,000.00
in
United
States Treasury Notes were placed in the general operating business bank
account of Murchison Investment Bankers, Inc., also known as Murchison
Investment Bankers, Ltd., and expended for the general operating expenses
of the affiliated companies, Murchison Group, Inc., and the Murchison
Investments
Bankers,
Murchison,
Inc.,
and/or
Chairman/Chief
for
Executive
the
personal
Officer
of
use
the
of
Burrell
Hurst-Murchison
Corporation and/or Murchison Group, Inc., and (PARTIES), President of the
Hurst-Murchison Corporation and/or The Murchison Group, Inc.
(2) That Murchison Investments Bankers, Inc., an affiliated company of The
Murchison Group, Inc., an entity substantially responsible for producing
the
revenue
and
income
of
Murchison
Group,
Inc.,
had
sustained
net
operating losses of approximately $77,000.00 in January of 1994; and/or
approximately
$112,000.00
in
February
of
1994;
and/or
approximately
$211,000.00 in March of 1994; and/or approximately $155,000.00 in April
of
1994;
and/or
approximately
$75,000.00
in
May
of
1994;
and/or
approximately $25,000.00 in June of 1994; and/or approximately $75,000.00
in July of 1994.
(3) That Murchison Investments Bankers, Inc., sold substantially its entire
owned inventory of securities between approximately April 15, 1994 and
June 24, 1994, thereby reducing Murchison Investment Bankers, Inc.’s, net
capitalization balances to limits less than permissible under the rules
and regulations of the National Association of Securities Dealers.
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(4) That the 1993 financial statements used by Murchison Investment Bankers,
Inc., to promote the sale of the Instant Securities were outdated and
showed the company to be in a positive, viable condition when in fact,
the
company
needed
revenues
generated
from
the
sale
of
the
Instant
Debentures to meet its ordinary operating expenses.
(5) That revenues from the sale of the Instant Debentures Securities were
needed for operating expenses and costs of The Murchison Group, Inc., and
its affiliated companies, and to pay interest to purchasers of the 1992
aforementioned subordinated debentures and for the personal use of the
aforementioned Burrell Murchison and (PARTIES).
then
you
will
find
the
defendant
guilty
as
charged
in
the
indictment.
Unless you so find from the evidence beyond a reasonable
doubt, or if you have a reasonable doubt thereof, you will acquit
the defendant and say by your verdict "Not Guilty."
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You are instructed that if you find beyond a reasonable
doubt that there is evidence in this case in regard to the
defendant’s
having
participated
in
recent
transactions
other
than, but similar to, the transaction for which he is now on
trial,
you
cannot
consider
such
other
transactions
for
any
purpose unless you find and believe beyond a reasonable doubt
that the defendant did participate in such other transactions, if
any, and even then you may only consider the same in determining
the intent of the defendant and knowledge of the defendant, if
any, in connection with the transaction, if any, alleged against
him in the indictment in this case, and for no other purpose.
Our law provides that a defendant may testify in his own
behalf if he elects to do so.
This, however, is a right accorded
a defendant, and in the event he elects not to testify, that fact
cannot be taken as a circumstance against him.
In this case, the defendant has elected not to testify and
you are instructed that you cannot and must not refer to or
allude to that fact throughout your deliberations or take it into
consideration
for
any
purpose
whatsoever
as
a
circumstance
against him.
A Grand Jury indictment is the means whereby a defendant is
brought to trial in a felony prosecution.
It is not evidence of
guilt
in
nor
can
it
be
considered
by
question of guilt of the defendant.
you
passing
upon
the
The burden of proof in all
criminal cases rests upon the State throughout the trial and
never shifts to the defendant.
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All persons are presumed to be innocent and no person may be
convicted of an offense unless each element of the offense is
proved beyond a reasonable doubt.
The fact that he has been
arrested, confined, or indicted for, or otherwise charged with
the offense gives rise to no inference of guilt at his trial.
The law does not require a defendant to prove his innocence or
produce any evidence at all.
The presumption of innocence alone
is sufficient to acquit the defendant, unless the jurors are
satisfied beyond a reasonable doubt of the defendant's guilt
after careful and impartial consideration of all the evidence in
the case.
The
prosecution
has
the
burden
of
proving
the
defendant
guilty and it must do so by proving each and every element of the
offense charged beyond a reasonable doubt and if it fails to do
so, you must acquit the defendant.
It is not required that the prosecution prove guilt beyond
all possible doubt; it is required that the prosecution's proof
excludes all "reasonable doubt" concerning the defendant's guilt.
A "reasonable doubt" is a doubt based on reason and common
sense after a careful and impartial consideration of all the
evidence in the case.
It is the kind of doubt that would make a
reasonable person hesitate to act in the most important of his
own affairs.
Proof beyond a reasonable doubt, therefore, must be proof of
such a convincing character that you would be willing to rely and
act upon it without hesitation in the most important of your own
affairs.
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In
the
event
you
have
a
reasonable
doubt
as
to
the
defendant's guilt after considering all the evidence before you,
and these instructions, you will acquit him and say by your
verdict "Not Guilty."
You are the exclusive judges of the facts proved, of the
credibility of the witnesses and the weight to be given their
testimony,
but
the
law
you
shall
receive
in
these
written
instructions, and you must be governed thereby.
After you retire to the jury room, you should select one of
your members as your Foreman.
at
your
deliberations,
vote
It is his or her duty to preside
with
you,
and
when
you
have
unanimously agreed upon a verdict, to certify to your verdict by
using the appropriate form attached hereto and signing the same
as Foreman.
During
your
deliberations
in
this
case,
you
must
not
consider, discuss, nor relate any matters not in evidence before
you.
You should not consider nor mention any personal knowledge
or information you may have about any fact or person connected
with this case which is not shown by the evidence.
No one has any authority to communicate with you except the
officer who has you in charge.
After you have retired, you may
communicate with this Court in writing through this officer.
Any
communication relative to the cause must be written, prepared and
signed by the Foreman and shall be submitted to the court through
this officer.
in
charge,
or
Do not attempt to talk to the officer who has you
the
attorneys,
or
the
concerning any questions you may have.
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Court,
or
anyone
else
Your sole duty at this time is to determine the guilt or
innocence of the defendant under the indictment in this cause and
restrict your deliberations solely to the issue of guilt or
innocence of the defendant.
Following
the
arguments
of
counsel,
you
will
consider your verdict.
«JUDGE», Judge Presiding
«COURTNO1» District Court
Harris County, TEXAS
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retire
to
CAUSE NO.
«CAUSENO»
THE STATE OF TEXAS
§
IN THE «COURTNO» DISTRICT COURT
VS.
§
OF HARRIS COUNTY, TEXAS
«DEFENDANT»
§
«MONTH» TERM, A. D., «YEAR»
V E R D I C T
"We, the Jury, find the defendant, «DEFENDANT1», not guilty."
_____________________________________
Foreman of the Jury
_____________________________________
(Please Print) Foreman
"We, the Jury, find the defendant, «DEFENDANT1», guilty of
«OFFENSE», as charged in the indictment."
_____________________________________
Foreman of the Jury
_____________________________________
(Please Print) Foreman
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