You Shouldn ’t Go to Jail Just Because Prosecutors Think You Did Something Bad

Can the government convict you of a crime without showing you had any understanding of the wrongdoing? Mark Ellison was convicted without any such showing  and is asking the Supreme Court to take his case.The case arises out of the tumult of 2008. A real estate company called DBSI went under during the Great Recession, like many other real estate companies at the time. But while for many this unhappy moment meant solely financial losses, for Ellison and his codefendants it meant criminal charges. Section 10(b) of the federal securities law outlaws “any manipulative or deceptive device” used to sell securities. Combined with SEC Rule 10(b)-5, this provides the primary avenue by which the government punishes securities fraud.The government claims that Ellison and his coworkers defrauded DBSI ’s customers in selling them the real-estate investment vehicles that ultimately went bust. But the jury found each innocent on most of the charges, convicting only under the “catch-all” provision of Rule 10(b)-5(c), which outlaws any fraud done “willfully”—but according to the Ninth Cir cuit ‘willfully’ in this context “does not require that the defendant know that the conduct was unlawful.”This runs contrary to traditional principles of criminal law. Normally crimes require not just a bad act but also a culpable mental state, what lawyers callmens rea. The difference between murder and manslaughter, for example, is typically whether the perpetrator intended to cau...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs