United States v. Allan L. D'honau, United States of America v. Gordon M. Copp

Defendants were charged with a third defendant, Carrano, in a 27-count indictment with conspiracy (Count One) and substantive counts of violation of the Security Exchange Act of 1934 and federal mail and wire fraud statutes. The two appeals arise under the same set of facts and have the same record. This brief factual statement applies to both eases.

Copp and D’Honau dealt with the common stock and “5% Adjustment Preferred” of Eastern Massachusetts Street Railway Company, a corporation. These defendants and others whom the government charges conspired with them, bought a large amount of stock between July 10, 1967 and August 2, 1967. Many of the purchases for this stock were made on delayed-payment arrangements (herein called P.O.D.) and were never paid for. This activity caused the market price of the stock to rise. Government exhibits indicate that on a number of occasions the various members of the alleged conspiracy bought and sold at the same time.

Appellant D’Honau did not pay for any of the stock he ordered. Copp paid for his stock, then sold at a profit of approximately $18,000.00.

On July 31, 1967, an advertisement was placed in the Wall Street Journal stating that the…