Keating

The People appeal from orders sustaining demurrers without leave to amend (Pen. Code, § 1002 et seq.) and setting aside (Pen. Code, § 995), and judgments dismissing, all counts of a second amended indictment charging defendants Charles H. Keating, Jr., and Ray C. Fidel with selling unqualified securities. (Corp. Code, §§25110, 25540.) The People theorized that the defendants violated the Corporate Securities Law by selling securities (bonds) without complying with certain terms and conditions of the qualification granted by the Corporations Department authorizing the sale. The defendants successfully argued that such acts are not crimes under the Corporate Securities Law. We conclude that selling securities without complying with the terms and conditions of the qualification authorizing their sale is a crime, and the trial court erred in holding otherwise. We reverse the orders and judgments and reinstate the dismissed charges.

Facts

From 1986 through April 1989, Keating was chief executive officer of American Continental Corporation (ACC). Lincoln Savings was an ACC subsidiary. During that period, ACC sold a series of securities known as subordinated debentures, debt…