Carlsbad Current-Argus Former broker takes stand in... -
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Published on: 7/29/2005
Last Visited: 7/30/2005
On the issue of securities fraud, McNertney again called Joseph C. Long, professor emeritus at the University of Oklahoma law college, as an expert witness on securities.
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Long said that the $600,000 promissory note could be considered a security because the intent was for Hornbeck to invest the money.
With that said, Long added that an investment contract consists of an investor, common enterprise and expectation of profit, and profits must come predominately through the efforts of others.
He said the promissory note, based on the criteria of the state statute, would not be considered an exempt transaction, and therefore, Hornbeck should have registered the transaction with the state Securities Commission.
"The defendant said that it was to be a win, win situation.But it turns out it was a lose, lose situation," he said.