Obama and 10b-5

The press somehow finds another way to shock me with its execrable “Obama had to lie about keeping your insurance because a more nuanced [read: true] phrasing wasn’t ‘saleable'” blitz.

So, a proposition:

Let’s say you’re in the business of prospecting for oil, and you’re sure you’ve located a major deposit. You don’t have the cash to drill, so you secure funding by selling limited partnership interests.

The well doesn’t play out, and the investors all lose their money. Turns out, you knew this was a possibility, but because you didn’t think you could sell the interests if you acknowledged this in your PPM, you instead instead expressly described the venture as risk-free. Indeed, despite understanding the risks, you sincerely believed the well would succeed.

Now you are a defendant. You have been sued by the investors, the SEC, and a state blue-sky agency. You are under criminal indictment for both state and federal securities-fraud.

Do you have an affirmative defense to any of the above actions?

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