Governs every business relation

The law is made in a way that, it governs every business relation. In many business contracts, in most cases there is a party that is not well a versed with the small and the underlying principles that govern the business relations that they are about to enter into. This is where the law is applicable and much needed to help defend and protect such people. In most cases, there are professionals in different fields who are aware of the principles governing certain contracts and at the same time they are aware that the party that is in contract with them does not know the deep principles, they take advantage of these and manipulate the innocent party for their own selfish benefits. This is where the law comes in full swing to help the innocent and protect their interests.

Having been given the authority to operate and maintain the affairs of the investment account of William wood, Mr. Zandford took advantage of this and diddled William wood of all of his investment. This was taken as a scheme that was aimed at defrauding Mr. Woods of his money. It was a two year long period that saw at first the withdrawal of funds by Mr. Zandford until he was able to convert all Mr. Wood's money into his own name. As his part of defence, his major question was whether the reason why he was convicted was in connection with the sale or purchase of security. The securities law in the US does not allow the exercising of any activity that is deemed fraudulent concerning the sale or purchase of securities (Bartos 2006). The act that was carried by Mr. Zandford was fraudulent; his argument was whether his acts of wire fraud were related to the breach of the law governing the sale or purchase of securities. According to the Cornel University Law School, 18 U.S.C section 1343 is the law that governs unlawful wiring that is aimed at defrauding; and it calls for punishment for such a crime.

His argument seems to be based on the fact that whatever he did was to defraud his client of money and what he was convicted of was the wire fraud he had committed. This is because to be convicted for such a fraud, it required that it should be established that the main aim of engagement in such a scheme was to defraud and also the use of the wire system did not in any way depict all the elements of the violation of the Rule 10b-5. This rule; Rule 10b-5 prohibits the making of omissions or false statements in connection with the purchase or the sale of securities. The definition of false statement is any statement that misleads or creates an impression that is false, and it can be used to deceive a person. (Fick and American Bar Association 1997) Mr. Zandford argument was also based on the fact that his act of selling and transferring of the securities belonging to Mr. Wood was just an incidental act of fraud that was highlighted by the absquatulating with proceeds that were got from the sell of the securities belonging to Mr. Wood.

The act that Mr. Zandford committed was a direct violation of the rule 10b which protects the use of any fraudulent means and ways in any affairs regarding the sale or purchase of securities. This is an act that is aimed at ensuring that there is honesty in the affairs involving the dealings in the securities. The Supreme Court in respect with the use of the word in connection with the sale or purchase of a security, it maintains that a broker who knows that he won't deliver and goes ahead and gets payment for such, or even engages in the act of selling the securities of a customer with an aim of misappropriating the funds, will be in violation of the of the Rule 10b-5 and s10 (b). Such violation calls for punishment and conviction as dictated by the laws that re violated by such an act.

Regarding the nature of the act that Mr. Zandford committed, both the fraudulent practices by the respondents and the security sales were not events that could be deemed dependent. In support to this, it is argued that such types of cases are not the ones that after the consummating of a lawful transaction the broker decided to run away with the proceeds or where by an investment of proceeds are made by a thief in the stock market. In this case o f Mr. Zandford, the act of fraud just coincided with sales. On the other side, the actions of the respondents were fraudulent as all the sales that were made; none of them was disclosed or authorized, thus all of them were deceptive. Mr. Zandford knew that the acts that he engaged into were fraudulent, for example the, he wrote checks and yet he knew redeeming the checks meant that the securities had to be sold.

It is therefore in this order that the Supreme Court considers the use of the word in connection with the sale or purchase of any security to include all the acts that leads to the breach of laws that govern such acts that affect the purchase and sale of the securities. This is evident in cases like those involving any fraud committed in connection with any activity that concerns the purchase of sale or sale of any security. To summarize the case of Mr. Zandford in the light of the use of connection with purchase of sale of security; the verdict that was given did not determine that the committed crime was in any connection with the sale of the security. From the government's side, there was enough evidence to determine that Zandford's actions were aimed at defrauding the Woods. The proof that Zandford and engaged in a scheme to defraud the wood's of their investments are:

Zandford had for a period amounting to 19 months transferred large sums of money to his own account
Before wood approached Mr. Zandford, the did not have any relationship
The money only benefited Zandford
Mr. Zandford took advantage of the condition of the woods that is there were both mentally and physically sick.

All the above explains well the conditions and the ways in which the purchase and sell of security has been manipulated

Reference

Cornel University Law School (n.d): "1343. Fraud by wire, radio or Television" retrieved on March 27, 2010 from http://www.law.cornell.edu/uscode/18/1343.html.
Bartos, J. M (2006): United States securities law: a practical guide.3rdEd. New York, Kluwer Law International
Fick, B. J and American Bar Association (1997): The American Bar Association Guide To Workplace Law :Everything You Need to Know About Your Rights as an Employee or Employer New York, Times Books.

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