9th Circ. Nixes Good Faith Defense In Trailer Park Case

Law360, New York (February 18, 2010, 2:12 PM EST) -- A federal appeals court has upheld a lifetime ban on a securities salesman who sold investors, including himself, worthless stakes in a trailer park conversion business, shutting down a defense that he lacked scienter because he had acted in good faith.

Alvin W. Gebhart of California showed ‚Äúsubstantial recklessness‚ÄĚ in marketing the investments, promissory notes in the trailer park business, without doing a proper investigation of their legitimacy, the U.S. Court of Appeals for the Ninth Circuit said in an opinion issued Wednesday.

The case centers...
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