The Elements of Fraud; Kozlowski
I’ve wondered why the criminals in the various corporate fraud scandals aren’t being brought up in state courts, not federal, and with the charge of fraud rather than the more complicated charge of violation of security laws. I see that Dennis Kozlowski actually was tried in New York’s state courts, and for larceny. I wonder if I as wrong about others. The Enron defendants, it seems to me, are guilty of fraud, but not so clearly guilty of violating accounting rules.
This webpage/A> lists the elements of fraud:
Taylor v. State Compensation Insurance Fund, 175 Mont. 432, 913 P.2d 1242 (1996) To sustain a claim of fraud, insurer was required to plead and prove each of the nine elements of fraud: (1) a representation; (2) falsity of the representation; (3) materiality of the representation; (4) speaker’s knowledge of the falsity of the representation; (5) the speaker’s intent it should be relied upon; (6) the hearer’s ignorance of the falsity of the representation; (7) the hearer’s reliance on the representation; (8) the hearer’s right to rely on the representation; and (9) the hearer’s consequent and proximate injury caused by reliance on the representation.
Those elements don’t seem hard to prove. Is there a problem of Federal securities law pre-empting state fraud statutes?