United States v. Wolfson

Louis Wolfson, who effectively controlled Continental Enterprises through his over-40-percent ownership stake despite holding no formal officer or director title, and his partner Elkin Gerbert (defendants) sold over 633,000 shares -- roughly 25 percent of Continental's outstanding stock -- through several brokerage houses between 1960 and 1962 without registering the sale, then blamed subordinates and the brokers for the registration failure at trial. They were convicted of violating federal securities registration law and appealed, arguing they were exempt because the sale was conducted by brokers rather than by an issuer, underwriter, or dealer.