Case Summaries
| Jurisdiction | Utah,United States |
| Citation | Vol. 7 No. 2 Pg. 30 |
| Pages | 30 |
| Publication year | 1994 |
Clark R. Nielsen. J.
Fraud and Scienter, Securities
On certiorari to the Utah Court of Appeals, the Supreme Court affirmed the conviction of the defendant, holding that scienter is not required to establish a violation of the Uniform Securities Act, Utah Code Ann. §§ 61-1-1 and 61-1-21. Under Utah Code Ann. § 76-2-103 a person acts "willfully" when he or she desires to engage in the conduct that causes a result. The defendant need not act with specific intent to defraud. A representation that is false or misleading may support a charge of securities fraud regardless of the defendant's specific intent.
The court rejects the defendant's argument that there is, or should be, a specific intent requirement in the statute. The Utah Uniform Securities Act is not a direct parallel to the scienter requirement of Rule 10b-5 of the Federal Securities Exchange Act of 1934. Under our state statute, "willfully" requires only that the prosecutor prove that the accused desired to engage in the conduct that caused the result.
State v. Larson, 228 Utah Adv. Rep. No. 3 (Dec. 17, 1993) (J. Zimmerman)
Contracts, Choice of Law and Choice of Forum Provisions
Plaintiff sued the defendant manufacturer under a value added resale ("VAR") agreement. Under the VAR agreement plaintiff purchased a computer system from the defendant Canadian corporation and, after improving and adding software for the customer, plaintiff was to resell the computer system to the customer at a reasonable profit. When defendant broke the VAR agreement and dealt directly with the customer, plaintiff filed suit in the Utah district court against the defendant manufacturer and the customer. Defendant moved to dismiss because the VAR agreement provided that New York would be the exclusive venue. The district court refused to dismiss and the defendant sought interlocutory appeal.
On appeal, the allegations of the plaintiff's complaint are reviewed in the light most favorable to the plaintiff. The trial court's decision that venue was proper, despite a forum selection clause to the contrary, is reviewed for abuse of discretion.
Under the Restatement of Contracts, the state law chosen by the parties to govern their contractual rights will be applied unless that state has no substantial relationship to the parties or the transaction, and there is no other reasonable basis for the choice. In this case, the court found no reasonable basis to apply New York law because there was no substantial relationship between New York and the parties or the transaction. "All contacts were within the...
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