## Facts

- Herbert Lindo was president of Kenilworth Systems Corporation, a publicly traded New York corporation that was financially distressed in 1986.
- Lindo directed a transfer agent to issue four original stock certificates (300,000 shares each) to attorney Gary Lange and represented that Kenilworth had received full consideration.
- The certificates bore restrictive legends stating the shares were unregistered under the Securities Act of 1933 and could not be sold without an effective registration statement.
- A separate letter agreement stated the shares were not sold to Lange but were issued to him to obtain loans.
- Using the shares as collateral, Lange obtained about $340,000 in loans from small financial institutions in Michigan and Wisconsin.
- Lindo and Kenilworth’s securities counsel, Richard Osserman, later arranged stock sales supported by opinion letters asserting the stock could be sold without registration under SEC Rule 144.
- Lindo, Lange, and Osserman were indicted for securities-related offenses; Lindo went to trial and did not testify.
- The jury convicted Lindo on multiple counts involving unlawful sale of unregistered securities in interstate commerce.

## Issues

1. Whether the district court erred by refusing to instruct the jury on a good-faith reliance-on-counsel (advice-of-counsel) defense.
2. Whether the evidence was sufficient to support Lindo’s convictions for unlawful sale of unregistered securities in interstate commerce.
3. Whether the district court abused its discretion by denying Lindo’s motion for a new trial.

## Decision

- The Sixth Circuit affirmed the convictions.
- The district court properly refused the advice-of-counsel instruction because the record lacked evidence that Lindo fully disclosed material facts to counsel and actually relied in good faith on counsel’s advice.
- The evidence, viewed favorably to the government, was sufficient for a rational jury to find Lindo participated in selling unregistered securities and had the required knowledge/intent.
- The district court did not abuse its discretion in denying a new trial, given the absence of instructional error and the sufficiency of the evidence.

## Legal Principles

- A defendant is entitled to an advice-of-counsel instruction only if there is evidentiary support that: (1) the defendant made full disclosure of all material facts to counsel, and (2) the defendant relied on counsel’s advice in good faith.
- A requested instruction should not be given when it lacks evidentiary support or would require the jury to rely on suspicion or speculation.
- The existence of attorney opinion letters, without evidence of full disclosure and subjective good-faith reliance by the defendant, is insufficient to require an advice-of-counsel instruction.
- On sufficiency review, the appellate court asks whether the evidence permits a rational jury to find guilt beyond a reasonable doubt when viewed in the light most favorable to the prosecution.
- Denial of a motion for a new trial is reviewed for abuse of discretion; arguments duplicating rejected instructional and sufficiency claims generally do not justify a new trial.

## Conclusion

The Sixth Circuit upheld Lindo’s convictions for unlawful sale of unregistered securities, holding that an advice-of-counsel jury instruction requires evidence of full disclosure to counsel and the defendant’s good-faith reliance, and that the government’s proof and the trial court’s denial of a new trial were legally sufficient.


United States v. Lindo, 18 F.3d 353 (6th Cir. 1994)