## Facts

- Microbyx Corporation, a Delaware research-and-development company, sought funding for a medical screening device but had not marketed the product, made profits, or maintained employees beyond its two officers.
- Constance Andresen served as Microbyx’s corporate secretary and chief financial officer and participated in financing activities involving sales of Microbyx securities.
- The Connecticut Department of Banking investigated Microbyx’s financing and issued a 1985 cease-and-desist order prohibiting further sales of unregistered securities in Connecticut.
- After later regulatory scrutiny, Andresen was prosecuted under the Connecticut Uniform Securities Act for selling unregistered securities and for securities fraud.
- A jury convicted Andresen of five counts of selling unregistered securities and acquitted her of all securities-fraud counts.
- On appeal, Andresen conceded the securities were not registered but argued they were exempt and challenged (1) burden allocation on exemptions, (2) admission of the cease-and-desist order, and (3) proof of willfulness given her claimed reliance on counsel.

## Issues

1. Whether, in a criminal prosecution for selling unregistered securities, the defendant bears the burden of persuasion to prove the securities were exempt from registration.
2. Whether assigning the burden of persuasion on exemptions to the defendant violates due process under the federal or state constitution.
3. Whether the trial court improperly admitted a prior cease-and-desist order and related testimony as unfairly prejudicial or improper character evidence.
4. Whether the evidence was sufficient to prove a willful violation where the defendant claimed reasonable reliance on advice of counsel.

## Decision

- The Connecticut Supreme Court affirmed the judgment of conviction.
- The court held that registration exemptions under the Connecticut Uniform Securities Act operate as affirmative defenses, and the defendant bears the burden of persuasion on exemption.
- The court concluded that this burden allocation does not violate due process because exemption is not an element of the offense.
- The court held the cease-and-desist order and related testimony were properly admitted to show knowledge of registration requirements and willfulness, and their probative value was not substantially outweighed by unfair prejudice.
- The court held the evidence permitted the jury to find a willful violation despite the defendant’s reliance-on-counsel theory.

## Legal Principles

- In prosecutions for selling unregistered securities under Connecticut law, the state must prove an offer or sale of a security in Connecticut that was not registered; statutory exemptions are treated as exceptions that the defendant must prove.
- Placing the burden of persuasion for an exemption on the defendant does not offend due process when the exemption is a statutory exception rather than a crime element.
- Prior regulatory enforcement orders may be admissible to prove knowledge, intent, and willfulness, subject to the trial court’s discretionary balancing of probative value against unfair prejudice.
- Advice of counsel may be relevant to whether a defendant acted willfully, but it does not automatically negate willfulness; the fact-finder may reject the defense based on the full evidentiary record.

## Conclusion

The court affirmed Andresen’s convictions, holding that exemption from securities registration is an affirmative defense the defendant must prove, that this allocation is constitutional, and that evidence of a prior cease-and-desist order and the jury’s finding of willfulness were legally supportable despite her reliance-on-counsel claim.


State v. Andresen, 256 Conn. 313, 773 A.2d 328 (Conn. 2001)