ÿWPCo …# VUNa %¯ 0$(µ4Ýñ 0 l 0Dl 0J° 0Tú 0^N U:¬ 0hæ 0rN 0|À 0†< 0 1uR U",Ç 0dó U,WU">ƒU*ÁB)ëDC AMW B¤0Á®ñxŸïÅàË¢«ÝMÐ*•úë z# 0@z#wº# D31%w d%n%Þ +ºé0È£2=k7è8ok: Ú;,ú>›&B ÁDÉaFö*HO LãoNRQÝjTÖGX:[W\¼jcv~&fvÓ¤g AOwmÆÆm 0DŒn D/Ðn Bÿn˜HP LaserJet 4Si/4SiMX PS 600dpiPSCRIPTÀÌÀääÀÀÌ0†(ÖÃ9 Z ‹6Times New Roman RegularX($¡¡‡€G tic3|xü+((3üÝ$¤¤Ý ƒ!ÝÝ  Ýà  àòòÚ  Ú0Ú  Úóó(#Ã$òòÚ  Ú0Ú  Úóó2 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô<þ6X9`("Courier NewTT26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô  ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)< Œ 9p`(ModernP ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ< Œ 9p`(Monaco< Œ 9p`(&Times New Roman< Œ 9p`(Arial% Line 7 d!!!!7Border 1dd€1"Cþÿ << Gÿÿ d &Ý ƒ!ÝÑ  ÑÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÔ€ ÔÔ€ ÔÓ  ÓÔ YYY ÔFILEDÔ€ XÔÌÌò òFebruary€13,€1996ÌÌCecil€Crowson,€Jr.ÌÔ€ ôÔAppellate€Court€Clerkó ó ¤Ý ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  Ýà àòòÚ  ÚÚ  ÚóóThe€appellants€previously€had€encountered€regulatory€or€legal€difficulties€in€the€form€ofÏà àcease€and€desist€orders,€civil€injunctions,€and€criminal€convictions€for€operating€similarÏà àenterprises€in€four€other€states,€to„wit:€€Ohio,€Florida,€Texas,€and€Oklahoma.Ì nÝ ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝRecords€furnished€to€an€investigator€for€the€enforcement€section€of€the€SecuritiesÏà àDivision€of€the€State€of€Tennessee€revealed€that€the€water€purifier€cost€U.S.A.€WholesaleÏà àClub€$181.85.€€The€vacuum€cleaner€cost€ranged€from€$216.00€to€$220.00€and€theÏà àcookware€cost€ranged€from€$206.96€to€$220.00.€€Evidence€of€€the€actual€price€paid€byÏà àU.S.A.€Wholesale€Club€for€other€specialty€products€was€not€introduced€at€trial.Ì åÝ ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝIn€their€attempts€to€become€a€member€of€the€club,€individuals€were€only€€required€to€bringÏà àguests€to€the€meetings.€€The€appellants€were€responsible€for€all€of€€the€marketing€of€theÏà àspecialty€products.€€This€principle€also€applied€to€members€who€invited€potential€buyers€toÏà àsales€meetings.Ì »Ý ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝAlthough€individuals€could€not€become€members€of€the€club€by€purchasing€specialtyÏà àproducts€in€their€own€name,€several€individuals€were€told€that€they€could€evade€this€ruleÏà àby€simply€making€up€a€hypothetical€name€under€which€they€could€purchase€the€product.Ì ÖÝ ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝPotential€members€were€told€that€they€could€work€diligently€for€one€year€and€then€retire,Ïà àthat€some€members€would€become€millionaires,€and€that€a€member€could€makeÏà àà à$500,000.00€per€year€just€by€bringing€in€more€potential€buyers€than€any€otherÏmember€for€à àone€month.Ì ˜Ý ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝOne€witness,€who€was€employed€as€a€controller€at€U.S.A.€Wholesale€Club,€testified€thatÏà àthe€appellant€Frost€refused€his€suggestion€that€a€separate€account€be€established€to€holdÏà àthe€purchase€money€for€the€wholesale€store.€Ì ÓÝ ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝThe€failure€to€disclose€this€information€is€relevant,€in€that,€the€appellants€routinelyÏà àrepresented€at€sales€meetings€that€a€significant€portion€of€the€purchase€price€of€theÏà àspecialty€products€was€being€set€aside€for€the€purchase€of€the€building€for€the€wholesaleÏà àstore.Ì ÆÝ ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝòòSeeóó€òòsupraóó€note€one.Ì ‹Ý ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝMr.€Young€testified€that€when€he€saw€his€photograph€in€a€promotional€brochure€whereinÏà àhe€was€identified€as€a€director,€he€questioned€how€that€occurred€and€was€told€that€he€wasÏà àelected€by€the€other€principals.Ì áÝ ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝAlthough€the€appellant€Brewer€lists€the€trial€court's€definition€of€"investment€contract"€asÏà àan€issue€on€appeal€in€his€brief,€he€has€failed€to€proffer€any€argument€whatsoever€inÏà àconjunction€with€the€issue.€€Therefore,€the€issue€is€waived€and€shall€not€be€consideredÏà àfurther€in€regard€to€the€appellant€Brewer.€€òòSeeóó€òòState€v.€Killebrewóó,€760€S.W.2d€228,€231Ïà à(Tenn.€€Crim.€App.€1988);€òòState€v.€Smithóó,€735€S.W.2d€831,€836€(Tenn.€Crim.€App.Ï1987);€à àTenn.€R.€€App.€Proc.€27(a)(7);€Tenn.€Ct.€Crim.€App.€R.€10(b).Ì("ÿÿ$££Ò  ÒÒ  Ò mÝ ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝBoth€of€those€states€subsequently€rejected€strict€application€of€the€òòHoweyóó€test.€Ga.€CodeÏà àAnn.€ðð€10„5„2(26)€(Michie€1994);€òòBurke€v.€Stateóó,€385€So.2d€648,€651„52€(Ala.€1980).Ì$$$$'ÿÿdxdñ+Ó€ “Ý ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝA€year€prior€to€the€òòFormanóó€decision,€the€Fifth€Circuit€Court€of€Appeals,€referring€to€theÏà à"solely"€requirement€of€òòHoweyóó€held€that€"[a]€literal€application€of€the€òòHoweyóó€test€wouldÏà àfrustrate€the€remedial€purposes€of€the€[federal€Securities]€Act."€òòSEC€v.€KoscotÏà àà àInterplanetary,€Inc.óó,€497€F.2d€473,€480€(5th€Cir.€1974).€€The€Court€emphasizedÏthat€"[t]he€à àsecurities€laws€are€intended€to€protect€investors€not€merely€to€test€the€ingenuity€ofÏà àsophisticated€corporate€counsel."€òòId.óó€€Moreover,€in€footnote€sixteen€of€the€òòFormanóó€à àopinionÏthe€Supreme€Court€expressly€referenced€òòSEC€v.€Glenn€W.€Turner€Enterprisesóó,€à à474€F.2d€476,Ï482€(9th€Cir.),€òòcert.óó€òòdeniedóó,€414€U.S.€821,€94€S.€Ct.€117,€38€L.Ed.2d€53€à à(1973),€butÏ"express(ed)€no€view,€...€as€to€the€holding"€of€òòTurneróó.€€In€òòTurneróó,€the€Ninth€à àCircuit€heldÏthat€the€word€"solely"€should€not€be€read€as€"a€strict€or€literal€interpretation€à àon€the€definition€of€anÏinvestment€contract,€but€must€be€construed€realistically,€so€as€to€à àinclude€within€the€definitionÏthose€schemes€which€involve€in€substance,€if€not€in€form,€à àsecurities."Ì ÔÝ ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝThe€hybrid€òòHoweyóó„risk€capital€test€has€been€adopted€by€judicial€decision€in€at€least€sixÏà àjurisdictions.€òòSee,€e.g.óó,€òòCasali€v.€Schultzóó,€732€S.W.2d€836€(Ark.€1987);€òòPeople€v.ÏGrahamóó,€à à210€Cal.€Rptr.€318€€(Cal.€Ct.€App.€1985);€òòSecurities€Administration€v.€CollegeÏAssistance€à àPlan,€à àInc.óó,€533€F.€Supp.€118€(D.€Guam€1981),€òòaff'dóó,€700€F.2d€548€(9th€Cir.Ï1983);€òòState€à àv.€Hawaii€Market€Centeróó,€485€P.2d€105€(Hawaii€1971);€òòState€v.€Georgeóó,€362ÏN.E.2d€1223€à à(Ohio€Ct.€App.€1975);€òòPratt€v.€Krossóó,€555€P.2d€765€(Oreg.€1976).Ìà àà àAt€least€six€states€have€adopted€the€test€by€statute.€òòSeeóó€Alaska€Stat.€ððÏà àà à45.55.130(12)€(1980);€Ga.€Code€Ann.€ðð€10„5„2(26)€(1981);€Mich.€Comp.€Laws€ððÏà àà à451.801(1);€N.D.€Cent.€Code€ðð€10„04„02(12)€(1985);€Okla.€Stat.€tit.€71,€ððÏ2(20)(P)€à à(1981);€Wash.€Rev.€Code€ðð€21.20.005(12)€(1979).Ìà àà àAt€least€five€states€have€adopted€the€test€by€regulatory€rule.€òòSeeóó€14€Ill.€Reg.€ððÏà à130.200€(1984);€N.M.€Sec.€Bureau€Reg.€603(D)€(1984);€N.C.€Admin.€Code€tit.€18,€r.€6.Ïà à1104(h)(2)€(1984);€Wis.€Admin.€Code€ðð€1.02(6)€(1984);€Wyo.€Sec.€Div.€Reg.€Ch.Ïà àII,€ðð€4(b)€(1986).Ì °Ý ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝThe€first€phrase€quoted€by€the€òòStanleyóó€court€is€from€òòMitzner€v.€Cardet€Int'l,€Inc.óó,€358€F.Ïà àSupp.€1262,€1268€(N.D.€Ill.€1973)€which€used€a€òòHowey„Formanóó€test;€the€second€quotedÏà àphrase€is€from€òòHawaii€Marketóó,€485€P.2d€at€109.Ì ¾Ý ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝThe€concept€of€risk€capital,€simply€put,€is€the€public€solicitation€of€capital€from€investorsÏà àwhich€will€be€subject€to€the€risks€of€the€enterprise.€òòHawaii€Marketóó€485€P.2d€at€109.€Ïà àConversely,€"[a]€common€enterprise€involving€vertical€commonality€is€one€in€which€theÏà àfortunes€of€the€investor€are€interwoven€with€and€dependent€upon€the€efforts€and€successÏà àof€those€seeking€the€investment€of€third€parties.€.€.€.It€requires€only€that€the€investor€andÏà àthe€promoter€be€involved€in€some€common€venture€without€requiring€the€involvement€ofÏà àother€investors.€.€.€.A€horizontal€common€enterprise,€on€the€other€hand,€requires€aÏà àheightened€degree€of€affiliation.€€Horizontal€commonality€ties€the€fortunes€of€each€investorÏà àto€the€success€of€the€overall€venture."€òòUnion€Planters€Nat.€Bank€v.€Commercial€Creditóó,Ïà à651€F.2d€1174,€1183€(6th€Cir.€1981);€òòseeóó€òòDeckebach€v.€La€Vida€Charters,€Inc.€of€Floridaóó,Ïà à867€F.2d€278,€281„82€(6th€Cir.€1989).Ì 3Ý ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝThe€appellant€Brewer€joined€the€appellant€Frost€in€this€contention.€€Our€analysis€appliesÏà àequally€to€the€rights€of€each€appellant.Ì ¹Ý ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝAdditional€authority€on€this€issue€may€be€found€in€òòRule€v.€Empire€Gas€Corp.óó,€563Ïà àS.W.2d€551,€554„55€(Tenn.€1978);€òòState€v.€Hardinóó,€691€S.W.2d€578,€581€(Tenn.€Crim.Ïà àApp.€1985);€òòState€v.€Smithóó,€626€S.W.2d€283,€285€(Tenn.€Crim.€App.€1981).Ì eÝ ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  Ý€Of€course,€procedural€default€that€rises€to€the€level€of€plain€error€is€not€waived.€€à àTenn.Ïà àR.€Crim.€P.€52(b).€€A€plain€error€analysis€is€unnecessary€in€the€present€case.Ì Ý ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝThis€rule€is€also€applied€in€civil€enforcement€proceeding€initiated€by€the€Securities€andÏà àExchange€Commission.€€In€such€cases,€"the€Commission€is€not€required€to€prove€that€anyÏà àinvestor€actually€relied€on€the€misrepresentations€or€that€the€misrepresentations€caused€anyÏà àinvestor€to€lose€money."€òòSEC€v.€Blavinóó,€760€F.2d€706,€711€(6th€Cir.€1985);€òòaccordóó€€òòSECÏà àv.€North€Am.€Research€&€Dev.€Corp.óó,€424€F.2d€63,€84€(2d€Cir.€1970);€òòBerko€v.€SECóó,Ï316€à àF.2d€137,€143€(2d€Cir.€1963);€òòSEC€v.€Lum's,€Inc.óó,€365€F.€Supp.€1046,€1059€(S.D.N.Y.Ïà à1973).Ì "Ý ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝThis€Court€does€not€possess€the€authority€or€power€"to€revise,€alter,€modify,€modernizeÏà àor€otherwise€change€a€common€law€rule€created€by€the€Supreme€Court."€òòState€v.€Bradenóó,Ïà à867€S.W.2d€750,€759€(Tenn.€Crim.€App.€1993);€òòseeóó€òòBarger€v.€Brockóó,€535€S.W.2d€337,Ïà à340„41€(Tenn.€1976);€òòBloodwoth€v.€Stuartóó,€221€Tenn.€567,€572,€428€S.W.2d€786,€789Ïà à(1968);€òòWatkins€v.€Stateóó,€216€Tenn.€545,€552,€393€S.W.2d€141,€144€(1965);€òòState€v.ÏFlattóó,€à à727€S.W.2d€252,€254€(Tenn.€Crim.€App.€1986);€òòState€v.€Davisóó,€654€S.W.2d€688,€690Ïà à(Tenn.€Crim.€App.€1983).Ì ‘Ý ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝThe€appellant€Frost€was€charged€with€several€counts€of€obtaining€money€through€falseÏà àpretenses€during€the€period€beginning€on€or€about€May€19,€1987€and€ending€on€DecemberÏà à31,€1988.€€During€that€period,€the€statutory€prohibition€of€obtaining€money€by€falseÏà àpretense€was€codified€at€Tenn.€Code€Ann.€ðð€39„3„901€(1982).€€That€offense€is€nowÏà àmerged€into€the€offense€of€theft.€€Sentencing€Commission€Comments€to€Tenn.€Code€Ann.Ïà àðð€39„14„101.Ì –Ý ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝThe€rules€regarding€the€appellate€examination€of€the€sufficiency€of€the€evidence€whichÏà àsupports€a€guilty€verdict€were€presented€in€the€discussion€of€the€previous€issue€and€for€theÏà àsake€of€€brevity€shall€not€be€repeated.Ì ¿Ý ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝAlthough€the€conviction€on€Count€21€is€reversed€and€dismissed,€the€appellant€Frost'sÏà àeffective€sentence€remains€unaffected€in€that€his€sentence€on€Count€21€was€to€runÏà àà àconcurrently€with€the€sentences€resulting€from€his€convictions€on€Counts€17€andÏ18.Ì ìÝ ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝThe€anti„fraud€provisions€of€the€federal€Securities€Act€of€1933€provide€that:Ìà8 à(a)€€It€shall€be€unlawful€for€any€person€in€the€offer€or€sale€of€any€securities€by€theÏuse€of€any€means€or€instruments€of€transportation€or€communication€in€interstateÏcommerce€or€by€the€use€of€the€mails,€directly€or€indirectly:Ìà8 à€€(1)€€to€employ€any€device,€scheme€or€artifice€to€defraud,€orÌà8 à€€(2)€€to€obtain€money€or€property€by€means€of€an€untrue€statement€of€a€material€factÏor€any€omission€to€state€a€material€fact€necessary€in€order€to€make€the€statementsÏmade,€in€light€of€the€circumstances€under€which€they€were€made,€not€misleading,€orÌà8 à€€(3)€€to€engage€in€any€transaction,€practice€or€course€of€business€which€operates€orÏwould€operate€as€a€fraud€or€deceit€upon€the€purchaser.Ìà à15€U.S.C.€ðð€77(q)(a).Ì EÝ ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝSpecifically,€the€jury€heard€evidence€against€the€appellant€Frost€concerning€an€Ohio€civilÏà àinjunction€dated€March€28,€1972;€another€injunction€in€Ohio€in€1977;€a€bankruptcy€in€OhioÏà àin€1978;€a€related€bankruptcy€in€Ohio€in€1979;€a€conviction€for€securities€violations€inÏà àOhio€on€or€about€August€16,€1978;€and€a€civil€injunction€in€Florida€filed€on€or€aboutÏà àFebruary€20,€1978.Ì ÙÝ ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝIn€òòState€v.€Partonóó,€694€S.W.2d€299,€302€(Tenn.€1985),€the€Supreme€Court€reiteratedÏà àseveral€of€the€exceptions€when€it€stated:€€"evidence€of€crimes€other€than€that€on€trial€hasÏà àbeen€admitted€as€being€relevant€to€such€issues€on€trial€as€motive€of€the€defendant,€intent€ofÏà àthe€defendant,€identity€of€the€defendant,€the€absence€of€mistake€or€accident€if€that€is€aÏà àdefense,€and,€rarely,€the€existence€of€a€larger€continuing€plan,€scheme,€or€conspiracy€ofÏà àwhich€the€crime€on€trial€is€a€part."€(citations€omitted).Ì Ý ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝòòSeeóó€òòState€v.€Hallockóó,€875€S.W.2d€285,€29l€(Tenn.Crim.App.€l993),€where€this€CourtÏà àheld:€"[w]hen€the€nature€of€the€crime€is€such€that€guilty€knowledge€must€be€proved,Ïà àevidence€is€admissible€that€at€another€time€and€place€not€too€remote€the€accusedÏà àà àcommitted€or€attempted€to€commit€a€crime€similar€to€that€charged.€€Also€evidence€ofÏother€à àcrimes€committed€by€the€accused€similar€to€that€charged€is€relevant€and€admissible€when€itÏà àshows€or€tend€to€show€a€particular€criminal€intent,€which€is€necessary€to€constitute€theÏà àcrime€charged."€Ì ÓÝ ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝSpecifically,€the€appellant€Frost's€brief€discusses€òòState€v.€Davisóó,€706€S.W.2d€96€(Tenn.Ïà àCrim.€App.€1985)(evidence€of€rape€which€occurred€four€years€prior€to€trial€excluded),Ïòòà àState€v.€Boboóó,€724€S.W.2d€760€(Tenn.€Crim.€App.€1981)(evidence€of€a€robbery€whichÏà àoccurred€two€years€prior€to€charged€offense€excluded),€òòState€v.€Hootenóó,€735€S.W.2d€760Ïà à(Tenn.€Crim.€App.€1981)(evidence€of€rapes€occurring€five€to€eight€years€prior€to€chargedÏà àoffenses€were€inadmissible€even€though€they€were€similar€in€character),€and€òòState€v.Ïà àBurchfieldóó,€664€S.W.2d€284€(Tenn.€1984)(evidence€of€crime€that€occurred€11€years€priorÏà àto€the€incident€under€consideration€at€trial€was€inadmissible€due,€in€part,€to€its€remotenessÏà àin€time).Ì ÌÝ ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝThe€argument€concerning€remoteness€contained€in€the€appellant€Frost's€brief€€alsoÏà àmentions€that€the€remoteness€in€time€of€the€prior€wrongs€destroys€the€"materiality"€of€suchÏà àacts€and€events€insofar€as€the€State€alleges€that€the€appellants€were€required€to€discloseÏà àthem€to€potential€and€actual€participants.€€We€summarily€reject€this€contention,€findingÏà àthat€a€reasonable€trier€of€fact€could€deem€information€concerning€the€prior€conviction€andÏà àcivil€injunctions€"material"€in€a€case€of€this€nature.Ì 0Ý ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝòòShappleyóó€has€been€superseded€by€statute€on€other€grounds€unrelated€to€the€propositionÏà àfor€which€the€case€is€cited€herein.Ì Ý ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝIn€his€brief,€the€appellant€Frost€states€that€he€is€unable€to€fully€argue€the€favorableness€orÏà àmateriality€of€the€undisclosed€evidence€because€he€was€unable€to€view€it.€€He€contendsÏà àthat€this€was€due€to€the€trial€court's€failure€to€identify€or€place€into€the€record€theÏà àà àsuppressed€material€after€the€trial€court€had€agreed€to€do€so.€€As€the€State€correctlyÏpoints€à àout,€however,€the€undisclosed€material€was€placed€in€the€record€in€a€large€envelope€à àmarkedÏ"Exhibits€Under€Seal."€€Because€of€the€appellant€Frost's€mistaken€belief€à àà àconcerning€theÏrecord,€he€failed€to€make€any€references€to€the€record€or€citation€to€legal€à àauthority€concerningÏthe€specific€items€of€undisclosed€information.€€At€least€in€a€technical€à àsense,€this€constitutes€waiverÏof€the€issue€on€appeal.€€òòState€v.€Killebrewóó;€supra;€€òòState€v.€à àSmithóó,€735€S.W.2d€831,€836€(Tenn.ÏCrim.€App.€1987).Ìà àà à€Furthermore,€pursuant€to€Tenn.€R.€App.€P.€27(a)(7),€a€brief€submitted€to€thisÏà àcourt€is€required€to€contain€"citations€to€the€authorities€and€appropriate€references€to€theÏà àrecord...relied€on."€€Moreover,€Rule€10(b)€of€this€court's€rules€requires€that€"[i]ssuesÏà àwhich€are€not€à àsupported€by€argument,€citation€to€authorities,€or€appropriate€references€toÏà àthe€record€will€be€treated€as€waived€in€this€court."€Tenn.€Ct.€Crim.€App.€R.€10€(b).€Ïà àHowever,€because€of€the€circumstances€under€which€this€technical€waiver€occurred,€weÏà àchoose€to€address€the€merits€of€the€issue.Ì ²Ý ƒ!ÝÑ#€d#ÑÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝThis€Court€is€aware€that€the€statements€contained€in€the€petition€for€divorce€are€merelyÏà àallegations€and€not€proven€facts.€€However,€the€obligation€of€the€prosecutor€to€disclose€isÏà ànot€limited€in€scope€to€competent€or€admissible€evidence,€but€extends€to€all€informationÏà àthat€is€both€favorable€and€material.€òòWorkman€v.€Stateóó,€868€S.W.2d€at€709;€òòState€v.Ïà àMarshallóó,€845€S.W.2d€at€233;€òòBranch€v.€Stateóó,€4€Tenn.€Crim.€App.€164,€173,€469€S.W.2dÏà à533,€536€(1969).ÌPtPtHHÚ(ÿáÿâùFG(üHHÚ(d'@Styl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑMonacoÑÑ ÑÒ  BA: T Monaco ÒÒ  BA: T Monaco Ò€1‚ƒCþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5($$””ò òÚ  Ú1Ú  Úó ó„„'÷ÿ dxdüÿP PdÝ ƒ!ÝÔ . ÔÔ€ÔÓ&€X„d&ÓÑ#€Xd#ÑÔ€ÔÝ  ÝÒ   ÒÒ ° ÒÓšÓÔ€ ÔÑ\R AØ'\ÑÑ7€6:XXd슊d7ÑÑ  ÑÙ€€ÙßL€#%";+'h|` Å `€€L߀€à@ àòòIN€THE€COURT€OFÏCRIMINAL€APPEALS€OF€TENNESSEEÌÌà@ àAT€NASHVILLEÌÌà@ àMARCH€SESSION,€1994óóÌÌÌSTATE€OF€TENNESSEEà àà àà à)Ìà àà àà àà àà àà à)Ìà àà àà àAppelleeà àà à)Ìà àà àà àà àà àà à)à àNO.€01C01„9308„CR„00276Ìà àà àà àà àà àà à)Ìà àà àà àà àà àà à)à àDAVIDSON€COUNTYÌV.à àà àà àà àà àà à)Ìà àà àà àà àà àà à)à àHON.€WALTER€C.€KURTZÌà àà àà àà àà àà à)à àJUDGEÌà àà àà àà àà àà à)ÌJAMES€A.€BREWER€andà àà àà à)à à(Violation€of€Securities€Laws;ÌC.€DONALD€FROSTà àà àà à)à àFalse€Pretenses)Ìà àà àà àà àà àà à)Ìà àà àà àAppellantsà àà à)ÌÌÌòòÌFOR€THE€APPELLANT,€BREWER:à àà àFOR€THE€APPELLEE:óóÌÌLucien€Daleà àà àà àà àà àà àCharles€W.€BursonÌ221€Fourth€Ave.€Northà àà àà àà àAttorney€GeneralÌFifth€FloorÌNashville,€TN€37219à àà àà àà àByron€M.€JonesÌà àà àà àà àà àà àà àAssistant€Attorney€GeneralÌòòFOR€THE€APPELLANT,€FROST:óóà àà àà à450€James€Robertson€ParkwayÌà àà àà àà àà àà àà àNashville,€TN€37243„0493ÌDavid€L.€RaybinÌHollins,€Wagster€&€Yarbrough,€P.C.à àà àVictor€S.€Johnson,€IIIÌ22nd€Floor,€Third€Nat.€Fin.€Centerà àà àDistrict€Attorney€GeneralÌNashville,€TN€37219Ìà àà àà àà àà àà àà àPaul€DeWittÌà àà àà àà àà àà àà àByron€M.€JonesÌAFFIRMED€IN€PART,€REVERSED€ANDà àà àAsst.€Dist.€Attorneys€GeneralÌDISMISSED€IN€PARTà àà àà àà à102€Metropolitan€CourthouseÌà àà àà àà àà àà àà àNashville,€TN€37201ÌÌÌOPINION€FILED:€€_____________________ÌÌÌÌÌJERRY€SCOTT,€PRESIDING€JUDGEÌÌÌÌÌÌÑ  ÑÑ7€6:XXdìXXdì7ÑÌÓ  Óò òòòO€P€I€N€I€O€Nó óóóÌÌÓ  ÓÓÓà àThe€appellant€James€A.€Brewer€€was€convicted€of€fourteen€counts€andÏthe€appellant€C.€Donald€Frost€of€sixteen€counts,€respectively,€of€violating€theÏsecurities€laws€of€the€State€of€Tennessee.€€Both€appellants€were€also€convictedÏof€four€counts€of€obtaining€money€by€false€pretenses.€€Each€appellant€receivedÏan€effective€sentence€of€seven€and€one€half€years,€being€ordered€to€serve€oneÏhundred€days€in€confinement€in€the€Davidson€County€Workhouse€with€theÏbalance€of€the€sentences€to€be€served€on€probation.€€The€appellant€Brewer€wasÏordered€to€pay€fines€in€the€sum€of€$3,600.00€and€the€appellant€Frost€wasÏordered€to€pay€fines€in€the€sum€of€$4,200.00.€€In€addition,€both€appellants€wereÏrequired€to€perform€two€hundred€fifty€hours€of€community€service€work€and€toÏmake€restitution€to€the€victims€of€their€crimes.€€ÌÌà àIn€this€appeal,€the€appellants€raise€the€following€issues:ÌÓÓà8 à(1)€Whether€the€trial€court€properly€instructed€the€jury€concerningÏthe€definition€of€an€"investment€contract"€under€the€TennesseeÏSecurities€Act;ÌÌà8 à(2)€Whether€the€trial€court's€instructions€to€the€jury€in€defining€anÏ"investment€contract"€violated€the€appellant€Frost's€due€processÏrights;ÌÌà8 à(3)€Whether€the€trial€court€erred€in€refusing€to€dismiss€theÏindictment€on€the€ground€that€the€Tennessee€Securities€Act€ofÏ1980€as€codified€in€Title€48,€Chapter€2€of€the€Tennessee€CodeÏAnnotated€is€unconstitutionally€ambiguous,€thereby€denying€theÏappellant€Brewer€of€his€right€to€a€fair€trial;ÌÌà8 à(4)€Whether€the€trial€court€properly€charged€the€jury€on€theÏelements€of€the€offense€of€misrepresenting€or€omitting€materialÏfacts€in€connection€with€the€sale€of€a€security;ÌÌà8 à(5)€Whether€the€trial€court€properly€prevented€the€appellants€fromÏpresenting€a€defense€based€upon€a€good€faith€reliance€on€theÏadvice€of€counsel€that€the€enterprise€was€not€subject€to€securitiesÏlaws.ÌÌà8 à(6)€Whether€the€trial€court€erred€in€its€refusal€to€bifurcate€the€trial€inÏthe€lower€court;ÌÌà8 à(7)€Whether€the€evidence€adduced€at€trial€was€sufficient€to€sustainÏthe€jury's€determination€that€the€appellant€Frost€was€guilty€ofÏobtaining€money€by€means€of€false€pretenses;ÌÌÑ7€ØåXXdÖXXdì7Ñà8 à(8)€Whether€the€evidence€adduced€at€trial€was€sufficient€to€sustainÏthe€jury's€determination€that€the€appellant€Frost€was€guilty€of€fraudÏin€the€sale€of€securities€to€Faron€Young;ÌÌà8 à(9)€Whether€the€convictions€on€all€of€the€counts€other€than€CountÏOne€merged€with€Count€One.ÌÌà8 à(10)€Whether€€the€trial€court€erred€in€permitting€the€State€toÏintroduce€evidence€of€the€appellant€Frost's€prior€criminalÏconviction€and€civil€injunctions€levied€against€him.ÌÌà8 à(11)€Whether€the€trial€court€erred€in€failing€to€require€the€state€toÏdisclose€to€the€appellant€Frost€certain€statements€made€by€Ïwitnesses€for€the€State€which€were€potentially€exculpatory;ÌÌà8 à(12)€Whether€the€trial€court€improperly€failed€to€grant€a€mistrial€dueÏto€the€introduction€of€testimony€concerning€a€recent€bankruptcy€byÏthe€appellant€Frost;ÌÌà8 à(13)€Whether€€testimony€that€an€individual€named€Mr.€Stanley€hadÏmade€threats€of€physical€violence€toward€one€of€the€victims€in€thisÏcase€was€irrelevant€and€unduly€prejudicial€to€the€appellant€Frost;ÌÌà8 à(14)€Whether€the€combination€of€errors€which€occurred€in€theÏlower€court€denied€the€appellant€Frost€a€fair€trial.ÌÌÓÓÌà@ àò òFACTSó óÌà àIn€September€of€1987,€appellants€and€others€undertook€to€establish€aÏprivate€wholesale€store,€whereby€the€initial€capital€for€purchasing€and€stockingÏthe€building€was€to€be€secured€by€the€selling€of€items€of€merchandise€toÏindividuals€who€sought€to€join€their€wholesale€club.€€After€consulting€with€anÏattorney€as€to€the€legality€of€the€business€under€Tennessee€law,€a€corporateÏcharter€was€secured€for€the€enterprise€under€the€name€"U.S.A.€Wholesale€Club,ÏInc."€€The€appellant€Brewer€was€the€president€and€a€director€of€the€corporation.€ÏThe€appellant€Frost€was€the€national€sales€director€of€the€corporation.€€At€theÏtime€the€business€was€terminated,€each€appellant€owned€27.5%€of€theÏcorporation's€stock.ÌÌà àPrior€to€beginning€the€enterprise,€the€appellants€consulted€with€anÏattorney€regarding€the€legality€of€their€proposed€business€under€TennesseeÍlaw.× ƒ& ××  ×€€They€were€advised€that€the€venture€would€not€violate€the€TennesseeÏConsumer€Protection€Act,€but€were€not€advised€concerning€securities€lawsÏbecause€the€attorney€did€not€believe€that€the€appellant's€proposed€businessÏactivity€involved€securities.€€The€appellants€testified€that€they€relied€upon€thisÏadvice€in€deciding€to€engage€in€the€enterprise.ÌÌà àThe€appellants€planned€to€initially€establish€a€wholesale€store€inÏNashville€and€then€expand€by€opening€stores€in€Memphis,€Knoxville,ÏChattanooga,€and€Jackson.€€The€Nashville,€Knoxville,€and€Memphis€storesÏwere€to€be€limited€to€6,500€associate€and€executive€members€and€the€JacksonÏand€Chattanooga€stores€were€to€be€limited€to€5,500€associate€and€executiveÏmembers.€€The€appellants€told€prospective€members€that€they€planned€toÏeventually€open€one€hundred€stores€across€the€country.ÌÌà àTo€raise€the€initial€capital€necessary€for€the€opening€of€the€store€inÏNashville,€the€appellants€and€others€began€to€hold€promotional€meetings€inÏwhich€they€sold€specialty€products€and€attempted€to€convince€individuals€to€joinÏthe€club.€€The€specialty€products€included€a€water€purification€system,Ïcookware,€a€vacuum€cleaner,€various€items€of€jewelry,€and€other€items.€€TheÏprice€of€these€products€as€offered€to€the€public€varied€at€times€but€wasÏannounced,€at€least€initially,€as€$995.00€per€item.€€However,€each€product€hadÍa€wholesale€value€of€approximately€two€hundred€dollars.× ƒ' ××  ×€€The€proceeds€fromÏthe€sale€of€each€$995.00€product€was€distributed€as€follows:€$438.00€went€forÏoperating€ÌÌÌexpenses,€$182.00€went€to€"overrides,"€$175.00€went€to€commissions,€andÏapproximately€$200.00€went€to€cover€the€cost€of€the€product.ÌÌà àThe€appellants€told€potential€purchasers€that€the€price€of€the€specialtyÏproducts€had€been€greatly€marked€up€in€order€to€facilitate€the€purchase€of€aÏbuilding€and€inventory€for€the€wholesale€store.€€Individuals€could€become€Ïmembers€of€the€club€through€facilitating€the€sale€of€specialty€products€byÏinviting€their€friends€to€sales€meetings€conducted€by€the€appellants× ƒ( ××  ×€or€byÏpurchasing€€the€products€themselves.× ƒ) ××  ×€€The€motivating€factors€for€becoming€aÏmember€of€the€club€were€the€attainment€of€(a)€commissions€from€the€sale€ofÍspecialty€products€to€individuals€that€the€member€brought€to€the€sales€meetingsÏand€(b)€the€right€to€distribute€buyer€cards€to€be€used€at€the€wholesale€storeÏwhen€it€opened.€€The€appellants€told€potential€members€that€the€buyer€cardsÏdistributed€by€a€member€would€entitle€that€member€to€a€commission€on€everyÏitem€purchased€at€the€wholesale€store€with€one€of€the€cards.€€The€potential€forÏhard€working€members€to€make€enormous€commissions€was€heavily€stressed.× ƒ* ××  ×ÌÌà àThe€program€had€three€levels€of€participation.€€The€first€level,€called€aÏ"temporary€associate,"€was€obtained€by€a€person€who€registered€with€the€clubÏby€paying€a€twenty„five€dollar€fee€and€began€attending€training€meetings.€€OnceÏa€temporary€associate€either€brought€a€guest€€to€a€meeting€who€then€purchasedÏa€specialty€product€or€the€temporary€associate€himself€bought€a€specialtyÏproduct€under€a€fabricated€name,€he€became€locked€in€as€one€of€the€6,500Ï"permanent€associates."€€Permanent€associates€were€entitled€to€receive€a€oneÏhundred€dollar€commission€on€the€sale€of€any€specialty€product€to€an€individualÏthe€associate€invited€to€a€sales€meeting.€€In€addition,€permanent€associatesÏwere€to€receive€twenty„five€buyer€cards€which€they€could€distribute€to€familyÏmembers,€friends,€and€others.€€Once€the€wholesale€store€opened,€permanentÏassociates€were€to€receive€a€four€percent€commission€on€all€merchandise€soldÏto€a€holder€of€one€of€their€buyer€cards.ÌÌà àOnce€five€specialty€product€sales€were€credited€to€a€permanentÏassociate,€the€associate€was€upgraded€to€"executive€member"€status.€ÏExecutive€members€of€the€club€were€to€receive€commission€in€the€amount€ofÏ$175.00€on€the€sale€of€any€specialty€product€to€one€of€their€invitees.€€They€alsoÏwere€to€receive€a€$75.00€commission€on€sales€of€any€specialty€products€madeÏto€individuals€invited€to€club€sales€meetings€by€any€associate€member€in€theirÏsales€organization.€€Moreover,€executive€members€were€entitled€to€receiveÏmore€buyer€cards€than€permanent€associates.€€Finally,€they€were€to€earn€a€sixÏpercent€commission€on€all€merchandise€purchased€at€the€wholesale€store€by€aÏholder€of€one€of€their€buyer€cards€and€a€two€percent€commission€on€all€storeÏsales€to€holders€of€buyer€cards€distributed€by€permanent€associates€within€theirÏorganization.ÌÌà àAlthough€some€members€of€U.S.A.€Wholesale€Club€were€pleased€withÏthe€enterprise,€many€others€were€not.€€Some€members€testified€that€they€neverÏreceived€commissions€that€they€were€due€from€their€sales.€€Others€testified€thatÏthe€appellants€had€misrepresented€information€about€the€enterprise€and€failedÏto€disclose€certain€material€information€about€their€past€business€activities.€€TheÏfacts€of€several€of€these€misrepresentations€merit€more€detailed€explanation.€€ÌÌà àFirst,€the€appellants€told€people€at€sales€meetings€that€a€substantialÏportion€of€the€purchase€price€of€the€specialty€products€would€be€set€aside€forÍthe€acquisition€of€a€building€and€inventory.€€Securities€Division€investigatorsÏsubsequently€discovered€that€those€statements€were€untrue.€€Bank€recordsÏrevealed€that€the€appellants€had€deposited€$758,436.00€into€the€wholesaleÏclub's€corporate€account€and€had€withdrawn€$756,000.00€therefrom.× ƒ+ ××  ×€ÌÌà àThere€was€also€evidence€at€trial€that€the€appellants€made€severalÏmisrepresentations€concerning€the€old€John€F.€Lawhon€building€which€wasÏsupposed€to€be€the€location€of€the€wholesale€store.€€For€example,€one€witnessÏtestified€that€the€appellant€Frost€told€her€that€certain€supporters€of€the€wholesaleÏclub,€namely€country€music€artist€Faron€Young€and€an€individual€from€Texas,Ïwould€purchase€the€building€for€the€store€and€pay€the€utilities.€€The€witnessÏfurther€testified€that€the€appellant€Frost€represented€to€her€that€an€inventory€ofÏrefrigerators€for€the€wholesale€store€was€in€the€upstairs€of€the€old€LawhonÏbuilding.€€€Another€witness€testified€that€she€was€told€at€a€sales€meeting€inÏAugust€1988€that€U.S.A.€Wholesale€Club€owned€the€old€Lawhon€building.€ÏMoreover,€even€when€the€appellants€did€disclose€at€some€of€the€sales€meetingsÏthat€they€had€only€contracted€to€purchase€the€building,€they€still€failed€toÏdisclose€that€they€did€not€have€the€requisite€capital€to€close€the€purchase€or€thatÍthe€earnest€money€for€the€purchase€had€to€be€borrowed.× ƒ, ××  ×€€Further€evidenceÏadduced€at€trial€revealed€that€U.S.A.€Wholesale€Club€never€owned€the€building,Ïhad€the€financial€resources€to€purchase€it,€or€had€particular€investors€who€wereÏwilling€to€purchase€the€building€for€the€club.ÌÌà àThe€appellants€also€represented€at€sales€meetings€that€they€hadÏexperienced€prosperity€with€similar€wholesale€club€enterprises€in€other€states.€ÏAs€an€example€of€their€prior€successes,€the€appellants€often€showed€a€film€thatÏdepicted€a€successful€wholesale€club€store€in€Ohio€with€which€they€wereÏinvolved.€€Although€there€was€some€testimony€at€trial€that€the€appellantsÏacknowledged€that€they€had€incurred€some€"problems"€with€the€Ohio€store€andÏthat€it€was€no€longer€in€operation,€numerous€witnesses€testified€that€they€wereÏnever€told€about€any€of€the€cease€and€desist€orders,€civil€injunctions,Ïbankruptcies,€or€criminal€convictions€that€arose€out€of€their€ventures€in€otherÏstates,€including€Ohio.× ƒ- ××  ×ÌÌà àThe€remaining€evidence€of€misrepresentations€can€be€discussed€moreÏbriefly.€€First,€in€the€promotion€of€their€company,€the€appellants€represented€thatÏcountry€music€artist€Faron€Young€was€a€member€of€the€board€of€directors€of€theÍcorporation.€€At€trial,€however,€Mr.€Young€testified€that€he€refused€to€become€aÏdirector€when€he€was€offered€the€position.× ƒ. ××  ×€€Second,€at€a€sales€meeting€aroundÏthe€beginning€of€the€summer€in€1988,€the€appellant€Frost€stated€to€membersÏand€guests€that€U.S.A.€Wholesale€Club€had€three€million€dollars€inÏcommissions€to€pay€out€before€Christmas€of€that€year.€€Bank€records€introducedÏat€trial€showed€that€the€total€funds€of€the€company€never€amounted€to€a€sumÏapproaching€three€million€dollars.€€Lastly,€there€was€testimony€at€trial€to€theÏeffect€that€the€appellant€Frost€stated€at€sales€meetings€that€the€wholesale€storeÏwould€be€able€to€offer€lower€prices€than€its€competitors€because€it€would€beÏable€to€acquire€inventory€at€reduced€costs€and€avoid€financing€charges€byÏpaying€cash€for€the€inventory.€€He€stated€that€the€necessary€capital€for€theseÏinventory€purchases€would€come€from€funds€which€were€derived€from€sales€ofÏspecialty€products.€€Bank€records,€however,€showed€that€no€funds€had€been€setÏaside€for€the€acquisition€of€Ìinventory€and€that€the€general€corporate€account€had€been€exhausted€almostÏentirely€by€the€time€business€activities€terminated.ÌÌà àIn€or€shortly€before€July€1988,€the€Securities€Division€of€the€State€ofÏTennessee€initiated€an€investigation€regarding€the€legitimacy€of€the€club.€€OnÏSeptember€2,€1988,€the€Tennessee€Commissioner€of€Commerce€andÏInsurance€issued€an€administrative€order€finding€that€the€appellants'€activities€inÍconnection€with€U.S.A.€Wholesale€Club€constituted€the€sale€of€unregisteredÏsecurities€under€the€Tennessee€Securities€Act€and€ordered€that€they€ceaseÏsuch€activities€until€they€were€registered€as€required€by€the€Act.€€Subsequently,Ïthe€appellants€continued€with€their€usual€business€practices€and€continued€toÏmake€sales€in€violation€of€the€administrative€order.€€The€matter€was€referred€byÏthe€Securities€Division€to€the€District€Attorney€for€prosecution€on€April€27,€1989.€ÏThis€appeal€was€taken€from€the€prosecution€and€convictions€which€thereafterÏresulted.€€ÌÌà@ àò òIó óÌà àThe€appellants'€initial€contention€in€this€appeal€is€that€the€trial€courtÏimproperly€instructed€the€jury€concerning€the€definition€of€an€"investmentÏcontract"€under€the€Tennessee€Securities€Act€of€1980€and€that€such€errorÏconstituted€reversible€error.€€We€disagree.× ƒ/ ××  ×ÌÌà àAt€the€outset€we€note€that€the€appellant€Frost€argued€at€trial€that€anÏ"investment€contract"€should€be€defined€in€accordance€with€the€test€stated€inÏòòSEC€v.€W.€J.€Howey€Co.óó,€328€U.S.€293,€301,€66€S.€Ct.€1100,€1104,€90€L.€Ed.Ï1244€(1946).€€Application€of€this€test€was€rejected€by€the€trial€court.€€Now€onÍappeal€the€appellant€Frost,€in€challenging€the€trial€court's€definition,€argues€thatÏthe€appropriate€definition€is€stated€by€the€òòHoweyóó€test€as€modified€in€òòUnitedÏStates€Hous.€Found.€v.€Formanóó,€421€U.S.€837,€860„66,€95€S.€Ct.€2051,€2064„67,Ï44€L.€Ed.€2d€621€(1975).€€The€elements€and€practical€applications€of€the€strictÏòòHoweyóó€test€and€the€so„called€òòHowey„Formanóó€test€are€not€synonymous€and,Ïtherefore,€constitute€separate€theories.ÌÌà à"An€appellant€cannot€change€theories€from€the€trial€court€to€the€appellateÏcourt."€òòState€v.€Banesóó,€874€S.W.2d€73,€82€(Tenn.€Crim.€App.€1993);€òòaccordóóÏòòState€v.€Matthewsóó,€805€S.W.2d€776,€781€(Tenn.€Crim.€App.€1990);€òòState€v.ÏAucionóó,€756€S.W.2d€705,€709€(Tenn.€Crim.€App.€1988).€€Such€action€constitutesÏwaiver.€òòState€v.€Gregoryóó,€862€S.W.2d€574,€578€(Tenn.€Crim.€App.Ï1993)(citations€omitted).€€However,€even€if€the€issue€was€not€waived,€we€wouldÏstill€find€no€reversible€error€in€the€trial€court's€instruction€to€the€jury€concerningÏinvestment€contracts.ÌÌà àSixteen€of€the€twenty„one€counts€in€the€indictment€charge€the€appellantsÏwith€various€violations€of€the€securities€laws.€€The€Tennessee€Securities€ActÏdefines€a€"security"€as:ÌÓÓà8 à(A)ny€note,€stock,€treasury€stock,€bond,€debenture,€evidence€ofÏindebtedness,€certificate€of€interest€or€participation€in€any€profit„sharing€agreement,€collateral„trust€certificate,€preorganizationÏcertificate€or€subscription,€transferable€share,€ò òinvestmentÏcontractó ó,€voting„trust€certificate,€certificate€of€deposit€for€aÏsecurity,€certificate€of€interest€or€participation€in€an€oil,€gas,€orÏmining€title€or€lease€or€in€payments€out€of€production€under€such€aÍtitle€or€lease;€or€any€certificate€of€interest€or€participation€in,Ïtemporary€or€interim€certificate€for,€receipt€for,€guarantee€of,€orÏwarrant€or€right€to€subscribe€to€or€purchase,€any€of€the€foregoing.ÌÌÓÓTenn.€Code€Ann.€ðð€48„2„102(12)(emphasis€added).€€Thus€there€is€no€questionÏthat€an€"investment€contract"€is€a€"security."€€The€question€remains,€however,€asÏto€what€constitutes€an€"investment€contract."€€This€issue€is€one€of€first€ÌÌÌimpression€in€this€State€given€that€neither€the€legislature€nor€the€judiciary€hasÏpreviously€promulgated€a€definition.ÌÌà àThis€Court€is€not€without€some€guidance€in€its€endeavor€to€formulate€aÏdefinition.€€In€òòDeWees€v.€Stateóó,€216€Tenn.€104,€106,€390€S.W.2d€241,€242Ï(1965),€the€Supreme€Court€of€Tennessee€stated€that€the€securities€laws€of€thisÏState€"are€remedial€in€character,€designed€to€prevent€frauds€and€impositionsÏupon€the€public."€€The€Court€further€stated€that€the€securities€acts€should€beÏconstrued€liberally€so€as€to€effectuate€the€espoused€€purposes€which€underlieÏthe€acts.€òòId.óó€€It€is€from€this€mandated€perspective€that€we€examine€this€issue.€à àÌà àIn€the€pursuance€of€a€definition€of€"investment€contract"€at€trial,€bothÏappellants€argued€for€the€application€of€the€so„called€strict€òòHoweyóó€test,€whereasÏthe€State€advocated€usage€of€the€òòHowey„Formanóó€test.€€After€fully€reviewingÏthese€standards,€the€trial€court€rejected€both€and€adopted€a€definition€espousedÏby€the€Hawaii€Supreme€Court.€€We€will€consider€each€of€the€definitions.ÌÌà@ àò òA.€€The€Development€of€a€Definitionó óÌà àConsiderable€scholarly€debate€has€ensued€concerning€the€properÏdefinition€of€an€investment€contract€security.€€In€òòSEC€v.€W.€J.€Howey€Co.óó,€theÏUnited€States€Supreme€Court,€interpreting€section€2(1)€of€the€Securities€Act€ofÏ1933,€15€U.S.C.€ðð77b(1),€proffered€the€following€definition:ÌÓÓà8 à[A]n€investment€contract...means€a€contract,€transaction€or€schemeÏwhereby€a€person€invests€his€money€in€a€common€enterprise€andÏis€led€to€expect€profits€solely€from€the€efforts€of€the€promoter€or€aÏthird€party...The€test€is€whether€the€scheme€involves€[1]€anÏinvestment€of€money€[2]€in€a€common€enterprise€[3]€with€profits€[4]Ïto€come€solely€from€the€efforts€of€others.€€If€that€test€be€satisfied,€itÏis€immaterial€whether€the€enterprise€is€speculative€or€non„speculative€or€whether€there€is€a€sale€of€property€with€or€withoutÏintrinsic€value.€ÌÌÓÓ328€U.€S.€at€301,€66€S.€Ct.€at€1104.€€For€a€period,€this€rule€was€strictly€applied€Ïnot€only€by€all€federal€courts,€but€also€by€several€state€courts.€òòE.g.óó,€€òòGeorgiaÏMarket€Centers,€Inc.€v.€Fortsonóó,€171€S.E.2d€620,€623„24€€(Ga.€1969);€òòGallion€v.ÏAlabama€Market€Centers,€Inc.óó,€213€So.2d€841,€845„46€(Ala.€1968).× ƒ2 ××  ×ÌÌà àIn€subsequent€years,€the€òòHoweyóó€test€was€criticized€by€both€courts€andÏscholars€as€being€too€rigid€and€thus€easily€circumvented.€òòSeeóó€òòe.g.óó,€òòSEC€v.ÏKoscot€Inter.,€Inc.óó,€497€F.2d€473,€479„84€(5th€Cir.€1974);€òòSEC€v.€Glenn€W.ÏTurner€Ent.,€Inc.óó,€474€F.2d€476,€482€(9th€Cir.€1973);€òòState€v.€Hawaii€MarketÏCenteróó,€485€P.2d€105,€108€(Hawaii€1971);€2€Louis€Loss€&€Joel€Seligman,ÏòòSecurities€Regulationóó€942„43€(3d€ed.€1989).€€Most€of€the€scrutiny€and€criticismÍconcerned€òòHoweyóó's€requirements€that€profits€be€derived€"solely"€from€the€effortsÏof€others€and€that€a€"common€enterprise"€had€to€exist.ÌÌà àIn€òòState€v.€Hawaii€Market€Center,€Inc.óó,€supra,€the€Hawaii€Supreme€CourtÏbecame€one€of€the€first€courts€to€openly€criticize€the€òòHoweyóó€test€and€reject€strictÏapplication€of€it.€€The€case€involved€a€business€enterprise€that€was€substantiallyÏsimilar€to€the€one€now€before€this€Court.€€In€that€case€a€corporation€was€formedÏfor€the€express€purpose€of€opening€a€retail€store€which€would€sell€merchandiseÏonly€to€persons€possessing€purchase€authorization€cards.€òòHawaii€Marketóó,€485ÏP.2d€at€107.€€In€order€to€generate€financing€for€the€enterprise,€the€corporationÏrecruited€"founder„members,"€with€the€maximum€number€of€such€membersÏbeing€set€at€five€thousand.€òòId.óóÌÌà àProspective€founder„members€were€asked€to€attend€recruitmentÏmeetings€where€a€speaker€explained€how€members€would€be€eligible€to€earnÏ(1)€immediate€income€before€the€store€became€operational,€and€(2)€futureÏincome€after€the€store€became€operational.€òòId.óó€€Members€were€to€earn€incomeÏin€a€variety€of€ways,€including€commissions€based€upon€bringing€in€newÏmembers€or€the€purchase€of€items€at€the€retail€store€with€a€purchaseÏauthorization€card€given€out€by€the€member.€òòId.óó€€A€person€became€a€founder„member€by€purchasing€from€the€corporation€either€a€sewing€machine€orÏcookware,€each€with€a€wholesale€value€of€$70.00,€for€$320.00.€òòId.óóÌÌà àDeclining€to€apply€the€òòHoweyóó€test,€the€Hawaii€Supreme€Court€noted€thatÏ"[t]he€primary€weakness€with€the€òòHoweyóó€formula€is€that€it€has€led€courts€toÏanaly[z]e€investment€projects€mechanically,€based€on€a€narrow€concept€ofÏinvestor€participation."€òòId.óó€at€108.€€The€Court€went€on€to€state€that€the€fulfillmentÏof€the€purposes€of€the€securities€laws€"requires€that€courts€focus€their€attentionÏon€the€economic€realities€of€security€transactions..."€òòId.óó€at€109€(citing€òòState€v.ÏGopher€Tire€&€Rubber€Co.óó,€146€Minn.€52,€56,€177€N.W.€937,€938€(1920)).€€InÏattempting€to€accomplish€this€goal,€the€Court€developed€two€theories€forÏextending€òòHoweyóó.€òòSeeóó€Loss€&€Seligman,€òòsupraóó,€at€972„73.ÌÌà àOne€method€employed€by€the€Hawaii€Supreme€Court€€was€to€interpretÏthe€"solely"€part€of€the€òòHoweyóó€definition€as€referring€to€the€"managerial"€effortsÏof€the€franchisor€or€member.€òòHawaii€Marketóó,€485€P.2d€at€108.€€The€court€foundÏthat€since€òòHoweyóó€involved€"no€actual€investor€participation,"€the€United€StatesÏSupreme€Court€had€"not€yet€decided€whether€an€investment€plan€involvingÏnon„managerial€€investor€participation"€would€also€be€encompassed€by€theÏconcept€of€an€investment€contract€security.€òòIdóó.€n.3.€€In€this€respect,€the€court€wasÏnot€actually€rejecting€this€prong€of€òòHoweyóó.€ÌÌà àThe€second€procedure€the€Hawaii€court€utilized€for€extending€òòHoweyóóÏwas€the€introduction€of€concepts€from€the€risk€capital€theory€which€originatedÏwith€the€California€Supreme€Court€in€an€opinion€authored€by€Justice€RogerÏTraynor.€òòSeeóó€òòSilver€Hills€Country€Club€v.€Sobieskióó,€55€Cal.2d,€811,€815,€13ÍCal.Rptr.€186,€188,€361€P.2d€906,€908„09€(Cal.€1961).€€Under€the€risk€capitalÏtest€the€focus€is€not€so€much€on€whether€the€investors€derive€their€profits€solelyÏfrom€the€efforts€of€others,€but€rather€on€whether€the€promoter€is€relying€on€theÏinvestors€for€a€substantial€portion€of€the€initial€capital€necessary€to€launch€theÏenterprise.€òòState€v.€Consumer€Business€Sys.,€Inc.óó,€482€P.2d€549,€555€(Or.€App.Ï1971).€€In€discussing€this€theory,€the€Hawaii€court€stated€that€the€"subjection€ofÏthe€investor's€money€to€the€risks€of€an€enterprise€over€which€he€exerts€noÏmanagerial€control€is€the€basic€economic€reality€of€a€security€transaction."ÏòòHawaii€Marketóó,€485€P.2d€at€109,€citing€Coffey,€The€Economic€Realities€of€aÏ"Security":€Is€There€a€More€Meaningful€Formula?€18€W.Res.L.Rev.€367,€412Ï(1967).ÌÌà àAttempting€to€establish€a€flexible€formula€which€would€protect€the€publicÏfrom€the€vast€array€of€alluring€investment€schemes,€the€court€held€that€anÏ"investment€contract,"€and€thence€a€"security,"€exists€when:ÌÓÓà8 à(1)€An€offeree€furnishes€initial€value€to€an€offeror,€and€(2)€a€portionÏof€this€initial€value€is€subjected€to€the€risks€of€the€enterprise,€andÏ(3)€the€furnishing€of€the€initial€value€is€induced€by€the€offeror'sÏpromises€or€representations€which€give€rise€to€a€reasonableÏunderstanding€that€a€valuable€benefit€of€some€kind,€over€andÏabove€the€initial€value,€will€accrue€to€the€offeree€as€a€result€of€theÏoperation€of€the€enterprise,€and€(4)€the€offeree€does€not€receiveÏthe€right€to€exercise€practical€and€actual€control€over€theÏmanagerial€decisions€of€the€enterprise.ÌÌÓÓòòId.óó€€Under€the€facts€of€the€case,€the€Hawaii€court€found€that€the€businessÏenterprise€and€the€attendant€agreements€between€the€corporation€and€theÍfounder„members€constituted€an€investment€contract.€€In€reaching€thisÏconclusion€the€court€stated:ÌÓÓà8 àThe€terms€of€the€offer€and€the€inducements€held€out€to€theÏprospects€clearly€indicate€that€the€substantial€premiums€paid€byÏfounder„members€to€[the€corporation]€are€given€in€considerationÏfor€the€right€to€receive€future€income€from€the€corporation.€€TheseÏovercharges€constitute€the€offerees'€investments€or€contributionsÏof€initial€value,€such€value€being€subjected€to€the€risks€of€theÏenterprise.Ìà8 à€à àIt€is€uncontested€that€the€recruitment€of€founder„membersÏwas€motivated€by€the€need€to€raise€capital€to€finance€the€openingÏof€the€proposed€[members„only€retail]€store.€€Inextricably€bound€toÏthe€success€of€this€enterprise€is€the€ability€of€the€founder„membersÏto€recoup€their€initial€investment€and€earn€income.€€TheÏrecruitment€fee€paid€to€distributors€and€supervisors,€during€theÏpre„operational€phase€of€the€plan,€rests€upon€the€promoters'Ïability€to€sell€the€success€of€the€plan€to€prospective€members.€€InÏaddition,€those€members€who€choose€to€rely€solely€on€the€secondÏmethod€of€earning€income,€the€payment€of€commissions€based€onÏsales,€receive€no€return€at€all€on€their€investment€unless€the€storeÏfunctions€successfully....€[S]ince€membership€is€limited€to€fiveÏthousand,€a€very€large€percentage€of€founder„members€will€beÏtotally€dependent€on€sales€commissions€to€recover€their€initialÏinvestment€plus€income.€€It€is€thus€apparent€that€the€security€of€theÏfounder„members'€investments€is€inseparable€from€the€risks€of€theÏenterprise.€€The€success€of€the€plan€is€the€common€"thread€onÏwhich€everybody's€beads€[are]€strung."ÌÌÓÓòòId.óó€at€110.€€"In€order€to€negate€the€finding€of€a€security€the€offeree€should€haveÏpractical€and€actual€control€over€the€managerial€decisions€of€the€enterprise.€ÏFor€it€is€this€control€which€gives€the€offeree€the€opportunity€to€safeguard€hisÏinvestment,€thus€obviating€the€need€for€state€intervention."€òòId.óó,€at€111,€citingÏCoffey,€supra,€at€396„98.€€In€addition,€founder„members€had€none€of€"the€indiciaÏof€managerial€control€which€would€preclude€the€finding€of€a€security"€and€allowÍthem€to€"influence€the€utilization€of€the€accumulated€capital"€or€exercise€anyÏauthority€over€the€operation€of€the€proposed€retail€store.€òòId.óó€at€111.ÌÌà àA€few€years€after€the€òòHawaii€Marketóó€decision,€the€United€States€SupremeÏCourt€revisited€the€question€of€what€constitutes€an€investment€contract€underÏfederal€security€laws€in€òòUnited€Hous.€Found.,€Inc.€v.€Formanóó,€421€U.S.€837,€95ÏS.€Ct.€2051,€44€L.€Ed.2d€621€(1975).€€The€Court€emphasized€that,€in€searchingÏfor€the€meaning€and€scope€of€the€word€"security,"€"form"€should€be€disregardedÏin€favor€of€"substance"€with€the€focus€being€placed€on€the€"economic€reality"€ofÏthe€transaction.€òòId.óó€421€U.S.€at€848,€95€S.€Ct.€at€2058;€citing€òòTcherepnin€v.ÏKnightóó,€389€U.S.€332,€336,€88€S.€Ct.€548,€553,€19€L.Ed.2d€564€(1967);€òòSeeóóÏòòUnion€Planters€Nat'l€Bank€v.€Commercial€Credit€Bus.€Loans,€Inc.óó,€651€F.2dÏ1174,€1180€(6th€Cir.€1981).€€Apparently€realizing€that€its€earlier€pronouncementÏwas€too€rigid,€the€Court€undertook€to€refine€the€òòHoweyóó€test.€ÌÌà à€To€this€end,€the€Court€stated€that€"[t]he€touchstone€is€the€presence€of€anÏinvestment€in€a€common€venture€premised€on€a€reasonable€expectation€ofÏprofits€to€be€derived€from€the€òòentrepreneurial€or€managerial€effortsóó€of€others."ÏòòFormanóó,€421€U.S.€at€852,€95€S.€Ct.€at€2060€(emphasis€added).€€This€languageÍeffectively€deleted€the€strict€"solely"€requirement€from€the€test× ƒ6 ××  ×€in€much€theÏsame€manner€as€the€Hawaii€Supreme€Court€did.ÌÌà@ àò òB.€€The€Appropriate€Definition€of€"Investment€Contract"Ìà àó óà àFrom€our€review€of€the€case€law€of€other€jurisdictions,€it€appearsÏthat€the€òòHowey„Formanóó€test€is€the€majority€rule€in€the€United€States.€€However,Ïthe€definition€pronounced€in€òòHawaii€Marketóó€is€also€not€without€support.€€ItsÏcombined€òòHoweyóó„risk€capital€test,€or€forms€substantially€similar€thereto,€hasÏbeen€adopted€by€at€least€seventeen€jurisdictions.× ƒ7 ××  ×€€In€his€treatise€on€stateÏsecurities€laws,€Professor€Long€states€that€"it€is€arguable€that€this€test€willÍeventually€replace€òòHoweyóó[òò„Formanóó]€as€the€leading€test€for€investment€contracts,Ïat€least€at€the€state€level."€Joseph€C.€Long,€òòBlue€Sky€Lawóó€ðð€2.04(4),€at€2„146Ï(1992).€€In€addition,€the€United€States€Securities€and€Exchange€CommissionÏhas€also€expressed€approval€of€the€combined€òòHoweyóó„risk€capital€formula€asÏapplied€in€òòHawaii€Marketóó.€òòSeeóó€Applicability€of€the€Securities€Laws€to€Multi„levelÏDistributorship€and€Pyramid€Sales€Plans,€Securities€Act€Release€No.€33„5211,Ï36€Fed.€Reg.€23289,€17€C.F.R.€ðð231.5211,€Fed.€Sec.€L.€Rep.€(CCH)€ðð€1048Ï(Nov.€30,€1971).ÌÌà àCiting€òòStanley€v.€Commercial€Courier€Serv.,€Inc.óó,€411€F.€Supp€818,€822„23€(D.€Oreg.€1975)€as€an€illustrative€case,€the€appellant€Frost€contends€that€theÏtest€in€òòHawaii€Marketóó€is€far€broader€than€the€òòHowey„Formanóó€formula.€€AlthoughÏthe€òòStanleyóó€court€did€find€that€the€tests€were€not€"synonymous,"€it€also€statedÏthat€the€risk€capital€test€and€the€òòHowey„Formanóó€test€"are€essentially€the€same."€ÏThe€court€further€stated€that€"the€key€to€investment€contracts€under€eitherÏapproach€is€whether€the€investor€remains€a€'master€of€his€own€destiny'€orÏwhether€he€relinquishes€the€'practical€and€actual€control€over€the€managerialÏdecisions€of€the€enterprise'€to€others."€òòId.óó€at€823.× ƒ8 ××  ×€€This€point€is€particularlyÏsignificant€given€that€the€òòHawaii€Marketóó€formula€is€a€hybrid€test,€combining€bothÏelements€of€the€òòHoweyóó€and€risk€capital€tests.€€In€short,€òòStanleyóó€does€not€buttressÏthe€appellant€Frost's€contention€that€the€òòHawaii€Marketóó€definition€is€"far€broader"Íin€scope€than€òòHowey„Formanóó.€€Moreover,€some€courts€and€commentators€haveÏsuggested€that€the€tests€are€not€exclusive,€but€complimentary€and€alternative.ÏòòPeople€v.€Grahamóó,€210€Cal.€Rptr.€318,€325€n.12€(Cal.€Ct.€App.€1985);€òòsee€alsoóóÏòòState€v.€Consumer€Bus.€Sys.,€Inc.óó,€482€P.2d€549,€554€(Oreg.€Ct.€App.€1971).€ÌÌà àThe€first€prong€of€the€òòHawaii€Marketóó€test€is€nothing€more€than€theÏinvestment€concept€of€the€òòHowey„Formanóó€test.€€The€second€prong€adopts€theÏconcept€of€risk€capital,€whereas€òòHowey„Formanóó€focuses€on€the€existence€of€aÏcommon€venture,€i.e.,€vertical€or€horizontal€commonality.× ƒ9 ××  ×€€The€third€prong€ofÏòòHawaii€Marketóó€utilizes€the€more€liberal€concept€of€the€expectation€to€receive€aÏ"benefit"€instead€of€the€slightly€more€restrictive€concept€of€"profits"€found€inÏòòHowey„Formanóó.€€Lastly,€the€fourth€prong€makes€explicit,€in€layman's€terms,€theÏòòHowey„Formanóó€principle€that€the€investor€exercises€no€managerial€control.€€TheÏsimilarity€in€scope€of€the€two€tests€is€evident.ÌÌà àThe€òòDeWees€v.€Stateóó,€supra,€mandate€to€liberally€construe€the€securitiesÏlaws€in€order€to€protect€the€public€is,€standing€alone,€very€persuasive€authorityÍfor€the€adoption€of€€the€slightly€more€liberal€combined€òòHoweyóó„risk€capital€testÏenunciated€in€òòHawaii€Marketóó,€485€P.2d€at€109.€€Moreover,€this€test€will€betterÏeffectuate€the€remedial€purpose€of€the€security€laws,€namely€the€protection€ofÏthe€public€from€frauds€and€impositions,€òòId.óó,€manifested€not€only€in€the€obviousÏand€commonplace€but€in€"the€countless€and€variable€schemes€devised€byÏthose€who€seek€the€money€of€others€on€the€promise€of€profits."€òòHoweyóó,€328€U.S.Ïat€299,€66€S.€Ct.€at€1103.€€Finally,€the€test€provides€detailed€statements€of€itsÏelements€in€laymen's€terms€which€can€only€serve€to€promote€the€properÏadministration€of€justice€by€the€jury.ÌÌà àAccordingly,€we€hold€that€the€trial€court€properly€instructed€the€juryÏconcerning€the€definition€of€an€investment€contract€under€Tenn.€Code€Ann.€ððÏ48„2„102(12).€€We€commend€the€trial€court€in€taking€this€action€of€instructing€theÏjury€in€light€of€the€fact€that€"simply€reading€a€statute€to€a€jury€when€the€statuteÏcontains€words€requiring€clarification€does€not€satisfy€'the€demands€of€justice'Ïor€the€defendant's€constitutional€right€to€trial€by€jury."€òòState€v.€Teelóó,€793€S.W.2dÏ236,€249€(Tenn.€1990)(partially€quoting€òòState€v.€McAfeeóó,€737€S.W.2d€304,€308Ï(Tenn.€Crim.€App.€1987)).€€Finally,€we€find€that€the€jury€properly€applied€theÏòòHoweyóó„risk€capital€test,€as€stated€in€òòHawaii€Marketóó€to€the€facts€andÏcircumstances€of€this€case.ÌÌà@ àò òIIó óÌà àThe€appellant€Frost€argues€that,€even€assuming€the€òòHoweyóó„risk€capitalÏtest€as€stated€in€òòHawaii€Marketóó,€485€P.2d€at€109,€is€the€appropriate€standard,Ïthe€application€of€the€test€to€him€in€this€case€violated€his€due€process€rights.€€HeÏpoints€out€that€€no€Tennessee€case€has€ever€"hinted"€that€the€òòHoweyóó„risk€capitalÏtest€would€be€adopted€in€Tennessee€and€asserts€that,€conversely,€òòState€v.ÏBurrowóó,€769€S.W.2d€510€(Tenn.€Crim.€App.€1989),€suggests€that€the€òòHowey„Formanóó€test€should€be€adopted.€€Based€on€these€contentions,€the€appellantÏFrost€claims€that€he€did€not€have€fair€notice€that€an€investment€contract€wouldÏbe€defined€so€broadly€and,€thus,€no€notice€that€his€actions€were€criminal.€òòSeeÏgenerallyóó€òòState€v.€Schimpfóó,€782€S.W.2d€186,€189€(Tenn.€Crim.€App.€1989).ÌÌà àThe€appellant€Frost's€position€is€flawed.€€Although€it€is€true€that€no€caseÏfrom€this€State€has€ever€specifically€suggested€that€the€òòHoweyóó„risk€capital€testÏformulated€in€òòHawaii€Marketóó€would€be€adopted,€òòDeWeesóó,€216€Tenn.€at€106,Ï390€S.W.2d€at€242,€made€it€clear€that€the€securities€laws€would€be€interpretedÏliberally€by€the€courts.€€Furthermore,€we€find€that€òòBurrowóó€in€no€shape,€form,€orÏfashion€implied€that€Tennessee€would€follow€the€òòHowey„Formanóó€test.€€ThereÏthis€Court€held€that€whether€a€transaction€involves€the€sale€of€a€"security"€is€aÏquestion€to€be€determined€by€the€finder€of€fact,€òòBurrowóó,€769€S.W.2d€at€513,Ïwithout€addressing€the€issue€of€how€an€investment€contract€should€be€defined.ÌÌà àOther€jurisdictions€have€found€that€the€broadening€of€the€definition€of€anÏinvestment€contract€does€not€violate€the€due€process€rights€of€the€offender.€òòE.g.óó,ÍòòState€v.€Duncanóó,€593€P.2d€1026,€1033€(Mont.€1975).€€In€addition,€the€appellantÏFrost€was€particularly€aware€that€many€states€have€begun€to€adopt€more€liberalÏdefinitions€for€investment€contracts€in€view€of€the€fact€that€the€òòHoweyóó„risk€capitalÏtest€adopted€in€this€case€has€previously€been€applied€against€him€in€òòPeltier€v.ÏConsumer€Companies€of€Americaóó,€et€al,€Court€of€Common€Pleas,€FranklinÏCounty,€Ohio,€March€31,€1977,€wherein€the€appellant€Frost€was€one€of€thirteenÏdefendants€enjoined€from€"any€future€sales€of€investment€contracts"€or€"anyÏfurther€violations€of€the€Ohio€Securities€Act,€Chapter€1707€R.C."ÌÌà àWe€further€find€that€the€absence€of€a€statutory€or€common€law€definitionÏof€an€investment€contract€at€the€time€the€offenses€were€committed€does€notÏrender€Tenn.€Code€Ann.€ðð€48„2„102(12)€unconstitutionally€vague.× ƒ: ××  ×€€In€òòBurrowóó,Ïthis€Court€stated:ÌÓÓà8 àà àFinally,€Mr.€Ward€contends€that€the€term€"security"€is€soÏvague€that€dismissal€of€the€charges€is€required.€€He€contends€thatÏthe€dearth€of€Tennessee€cases€interpreting€the€term€requiresÏdismissal.Ìà8 àà àWe€note€that€there€are€numerous€cases€from€otherÏjurisdictions,€both€state€and€federal,€cited€in€the€briefs€of€theÏparties€interpreting€various€statutory€definitions€of€the€termÏ"security."€€The€fact€that€there€are€no€Tennessee€cases€does€notÏpreclude€the€prosecution€of€the€appellees€for€alleged€violations€ofÏthe€statutes.€€It€is€only€after€someone€is€prosecuted€that€theÏappellate€courts€have€the€opportunity€to€write€opinions€interpretingÏthe€statutes.€€Taken€to€its€logical€extreme,€this€argument€wouldÏproduce€a€"Catch€22"€situation€that€would€preclude€theÏprosecution€of€anyone€under€any€new€criminal€statute,€since€noÍone€could€be€prosecuted€until€the€statute€was€interpreted€and€theÏstatute€could€not€be€interpreted€until€someone€was€prosecuted.ÌÌÓÓòòId.óó€at€514.ÌÌà àGiven€the€facts€and€circumstances€of€this€case€and€these€particularÏappellants,€we€find€that€there€was€no€impingement€upon€the€due€process€rightsÏof€either€of€€the€appellants.€€Therefore,€this€issue€is€without€merit.ÌÌà@ àò òIIIó óÌà àThe€appellant€Brewer€asserts€that€the€trial€judge€erroneously€refused€toÏinclude€in€his€instructions€to€the€jury€the€language€in€the€definition€of€a€securityÏwhich€excludes€"a€note€or€other€evidence€of€indebtedness€€issued€in€aÏmercantile€or€consumer,€rather€than€an€investment,€transaction."€òòSeeóó€Tenn.ÏCode€Ann.€ðð€48„2„102(12)(C).€€He€contends€that€the€ordinary€construction€ofÏthe€Tennessee€Securities€Act€in€defining€an€investment€contract€would€have€toÏconsider€the€"debt€factor."€€Based€upon€the€record€in€this€case,€we€disagree.ÌÌà àFor€the€sake€of€context,€we€mention€that€the€definition€of€a€security€underÏthe€Tennessee€Securities€Act€includes€any€"note"€or€"evidence€ofÏindebtedness"€unless€it€was€"issued€in€a€mercantile€or€consumer,€rather€than€anÏinvestment,€transaction."€òòSeeóó€òòId.óó€at€ðð€48„2„102(12).€€This€exclusion€is€simply€theÏcodification€of€a€long€recognized€distinction€between€notes€issued€in€theÍcontext€of€an€investment€and€those€issued€to€finance€the€purchase€of€mercantileÏor€consumer€goods.ÌÌà àThe€difficulty€with€the€appellant€Brewer's€argument,€however,€is€that€thisÏexclusion€is€inapposite€to€the€facts€of€the€present€case.€€The€State€charged€theÏappellants€with€selling€"investment€contracts,"€not€"notes"€or€"evidences€ofÏindebtedness."€€No€evidence€was€offered€by€any€party€to€the€effect€that€theÏappellants€were€issuing€"notes"€or€"evidences€of€indebtedness,"€much€less€thatÏthey€were€issuing€such€notes€or€evidences€of€indebtedness€"in€a€mercantile€orÏconsumer€transaction."€€The€trial€court€had€no€obligation€to€instruct€the€juryÏconcerning€issues€not€fairly€raised€by€the€evidence€presented€at€trial.€òòLester€v.€ÇStateóó,€212€Tenn.€338,€346,€370€S.W.2d€405,€409€(1963);€òòState€v.€Leaphartóó,€673ÏS.W.2d€870,€873€(Tenn.€Crim.€App.€1983).€€An€instruction€on€this€issue€couldÏhave€only€served€to€confuse€the€jury,€not€to€enlighten€them.ÌÌà àEven€assuming€that€evidence€which€would€justify€the€proposedÏinstruction€was€presented€at€trial,€the€appellant€Brewer€has€failed€to€make€anyÏreferences€thereto€in€his€brief€on€appeal.€€This€failure€constitutes€waiver€of€theÏissue.€Tenn.€Ct.€Crim.€R.€10(b);€òòState€v.€Killebrewóó,€supra;€òòsee€alsoóó€Tenn.€R.€App.ÏProc.€27(a)(7)€and€(g).€€Furthermore,€the€appellant€Brewer€cannot€raise€thisÏissue€since€he€did€not€submit€a€written€special€request€for€an€instruction€on€thisÏissue€to€the€trial€court€at€the€appropriate€time.€òòState€v.€Dulsworthóó,€781€S.W.2dÏ277,€288€(Tenn.€Crim.€App.€1989).ÌÌà àFor€all€of€the€above€reasons,€the€trial€court€did€not€err€in€refusing€toÏinstruct€the€jury€concerning€the€exclusionary€language.€€This€issue€has€no€merit.ÌÌà@ àò òIVó óÌà àThe€appellant€Frost€next€contends€that€the€trial€court€erroneously€failed€toÏinstruct€the€jury€concerning€the€requirement€of€reliance€by€the€victims€on€theÏmisrepresentations€for€which€the€appellants€were€convicted.€€The€appellantÏFrost,€however,€during€the€trial€in€the€court€below,€neither€objected€to€the€trialÏcourt's€failure€to€charge€the€jury€that€reliance€was€an€element€of€the€offense€norÏsubmitted€a€special€request€for€a€jury€instruction€on€the€issue€of€reliance.ÌÌà àGenerally,€"[i]n€the€absence€of€an€objection€or€a€special€request,€aÏdefendant€may€not€later€raise€an€issue€regarding€an€omission€in€the€court'sÏcharge."€òòState€v.€Norrisóó,€874€S.W.2d€590,€600€(Tenn.€Crim.€App.€1993)(citingÏòòState€v.€Reeceóó,€637€S.W.2d€858,€861€(Tenn.€1982);€òòState€v.€Blackwoodóó,€713€ÌÑ X ÑÑ X ÑS.W.2d€677,€681€(Tenn.€Crim.€App.€1986)).× ƒ; ××  ×€€Thus,€the€issue€of€an€omission€inÏthe€court's€charge€is€usually€waived€if€the€defendant€fails€to€raise€it€at€the€trialÏlevel.× ƒ< ××  ×€€€Ìà àHowever,€€Frost€contends€that€reliance€is€an€essential€element€ofÏsecurities€fraud.€€Whether€requested€or€not,€€the€trial€court€has€the€duty€ofÏinstructing€the€jury€with€respect€to€essential€elements€of€the€offenses€charged.€ÏòòSeeóó€òòState€v.€Teelóó,€793€S.W.2d€236,€249,€(Tenn.),€òòcertóó.€òòdeniedóó,€498€U.S.€1007Ï(1990);€òòCasey€v.€Stateóó,€491€S.W.2d€90,€94„95€(Tenn.€Crim.€App.€1972).€€ÏNevertheless,€because€reliance€is€not€an€€element€of€any€of€the€chargedÏoffenses,€Frost€cannot€prevail€on€this€issue.ÌÌà àThe€statutory€provisions€concerning€misrepresentations€upon€which€theÏappellant€Frost€was€convicted€provide€as€follows:ÌÓÓà8 àIt€is€unlawful€for€any€person,€in€connection€with€the€sale€orÏpurchase€of€any€security€in€this€state,€directly€or€indirectly:Ìà8 àà0 à(1)€To€employ€any€device,€scheme,€or€artifice€to€defraud;Ï[or]Ìà8 àà0 à(2)€To€make€any€untrue€statement€of€a€material€fact€or€toÏomit€to€state€a€material€fact€necessary€in€order€to€make€theÍstatements€made,€or€the€circumstances€under€which€theyÏare€made,€not€misleading[.]ÌÌÓÓTenn.€Code€Ann.€ðð€48„2„121(a)(1)„(2).€€Upon€even€a€cursory€reading€of€that€Ïprovision,€it€is€evident€that€proof€of€reliance€is€not€expressly€mandated€by€theÏstatute.€€We€must€assume,€therefore,€that€the€appellant€Frost€is€advocating€thatÏthis€Court€impose€such€an€element€in€our€interpretation€and€application€of€theÏstatutory€provision.ÌÌà àIn€support€of€his€contention€that€reliance€on€the€misrepresentations€byÏthe€victims€is€an€element€of€the€offense,€the€appellant€Frost€cites€two€cases,ÏòòDiversified€Equities,€Inc.€v.€Warrenóó,€567€S.W.2d€171€(Tenn.€Crim.€App.€1976)Ïand€òòShores€v.€Sklaróó,€647€F.2d€462€(5th€Cir.€1981).€€€Those€cases,€however,€areÏnot€on€point€and,€therefore,€are€of€no€persuasive€value€in€that€they€both€concernÏòòprivateóó€rights€of€action€for€damages€concerning€violations€of€securities€lawsÏrather€than€criminal€enforcement€of€such€laws€by€governmental€entities.ÌÌà àCases€from€other€jurisdictions€have€uniformly€illustrated€that€theÏrequirements€of€proof€in€private€actions€and€criminal€cases€are€not€identical.€ÏFor€example,€in€òòKramas€v.€Security€Gas€&€Oil€Co.,€Inc.óó,€which€involved€a€privateÏaction€concerning€violations€of€federal€securities€laws,€the€United€States€CourtÏof€Appeals€for€the€Ninth€Circuit€stated:€€"Prosecutions€and€enforcement€actionsÏinvolve€interests€and€procedures€different€from€those€involved€in€privateÏdamage€suits.€€The€Government€is€not€'required€to€prove€that€anyone€wasÏdefrauded€or€that€any€investor€sustained€loss,'...but€such€proof€is€essential€toÏrecovery€by€a€private€investor."€€672€F.2d€766,€770€(9th€Cir.€1982)(partiallyÏquoting€òòFarrell€v.€United€Statesóó,€321€F.2d€409,€419€(9th€Cir.€1963)€whichÍinvolved€a€criminal€prosecution€for€fraudulent€acts€concerning€securities).€€InÏaccord€with€òòKramasóó,€other€opinions€in€cases€involving€criminal€prosecutions€forÏfraudulent€acts€which€violated€securities€laws€have€refused€to€require€relianceÏas€an€element€of€the€offenses.€òòE.g.óó,€òòUnited€States€v.€Amickóó,€439€F.2d€351,€366Ï(7th€Cir.€1971);€òòFarrellóó,€321€F.2d€at€419;€òòState€v.€Faceróó,€552€P.2d€110,€111„12Ï(Utah€1976);€òòState€v.€Shadeóó,€726€P.2d€864,€872€(N.M.€Ct.€App.€1986)€òòoverruledÏon€other€grounds€byóó€òòState€v.€Olguinóó,€879€P.2d€92,99€(N.M.€Ct.€App.€1994).× ƒ= ××  ×ÌÌà àBased€upon€the€unambiguous€language€of€the€statutory€provisions€andÏthe€foregoing€cases,€we€decline€to€find€reliance€by€victims€is€an€element€to€theÏoffense€of€omitting€or€misrepresenting€a€material€fact€in€connection€with€the€saleÏor€purchase€of€securities.€€This€issue€is€without€merit.ÌÌà@ àò òVó óÌà àIn€the€next€assertion€of€error,€the€appellant€Brewer€contends€that€the€trialÏcourt€erred€by€declining€to€rule€that€his€reliance€on€the€advice€of€his€attorneyÏthat€his€undertaking€was€not€in€violation€of€the€law€was€a€defense€to€all€charges.€€ÏBrewer€has€failed€to€cite€any€authority€€from€this€jurisdiction€in€support€of€hisÏproposition,€instead€relying€solely€upon€persuasive€authority€€from€numerousÏother€fora.€€This€approach€would€be€meritorious€and€even€commendable€if€notÍfor€the€fact€that€the€Supreme€Court€of€Tennessee€has€already€spoken€on€thisÏissue.× ƒ> ××  ×€€ÌÌà àIn€òòHunter€v.€Stateóó,,€the€Tennessee€Supreme€Court,€in€upholding€a€juryÏinstruction€that€acting€upon€the€advice€of€counsel€is€not€a€defense€toÏembezzlement,€stated:ÌÓÓà8 àThe€fact€that€a€person€honestly€believes€that€he€has€a€right€to€doÏwhat€the€law€declares€to€be€illegal€will€not€affect€the€criminality€ofÏthe€act.€€The€advice€of€counsel€furnishes€no€excuse€to€a€person€forÏviolating€the€law,€and€cannot€be€relied€upon€as€a€defense€in€aÏcriminal€action.ÌÌÓÓ158€Tenn.€63,€69,€12€S.W.2d€361,€362€(1928)€(citation€omitted).€€The€CourtÏfurther€stated€that€to€hold€otherwise€"would€be€productive€of€disastrous€results,Ïopening€a€way€of€escape€from€prosecution€for€the€criminally€inclined€through€aÏdoor€held€ajar€by€ignorant,€biased,€or€purchasable€advisors."€òòId.óó,€158€Tenn.€atÏ70,€12€S.W.2d€at€363.€€We€hold€that€this€case€is€governed€by€the€rule€andÏanalysis€in€òòHunteróó€given€the€broad€language€employed€by€the€Supreme€Court.ÌÌà àSeveral€more€recent€authorities€exhibit€a€continued€adherence€to€thisÏrule.€€òòState€v.€Smithóó,€656€S.W.2d€882,€888„89€(Tenn.€Crim.€App.€1983)(trialÏcourt€properly€rejected€a€proposed€jury€instruction€that€the€defendant€was€notÏliable€for€willful€wrongdoing€if€he€acted€on€the€advice€of€his€attorney);€òòGarrett€v.ÏForest€Lawn€Memorial€Gardens,€Inc.óó,€588€S.W.2d€309,€315€(Tenn.€Ct.€App.Í1979)(the€defense€of€acting€under€the€advice€of€counsel€is€not€sufficient€toÏprevent€a€finding€of€guilt€in€either€a€civil€or€criminal€contempt€case);€òòRobinson€v.ÏAir€Draulics€Eng'g€Co.€Inc.óó,€214€Tenn.€30,€36,€377€S.W.2d€908,€911€(1964);€11ÏòòTenn.€Jur.óó,€ðð€8€at€293€(Michie€1992).€€This€issue€is€without€merit.ÌÌà@ àò òVIó óÌà àPrior€to€trial€the€appellant€Brewer€filed€a€motion€entitled€"Motion€to€StrikeÏAll€References€to€the€Tennessee€Securities€Act,€Violations€Thereof,€orÏParaphrases€Thereof,€Such€as€'These€Securities'€or€'Securities€Laws.'"€€In€theÏlast€paragraph€of€the€Motion,€the€appellant€Brewer€alternatively€requested€thatÏthe€trial€be€bifurcated€with€the€first€phase€being€concerned€solely€with€theÏquestion€of€whether€the€appellants'€enterprise€constituted€the€selling€ofÏsecurities.€€Both€the€primary€and€alternative€propositions€were€ruled€uponÏadversely€to€his€proposals.ÌÌà àOn€appeal,€he€contends€that€the€refusal€by€the€trial€court€to€bifurcate€theÏtrial€was€error.€€In€support€of€his€argument,€he€relies€exclusively€on€theÏSupreme€Court€case€of€òòHodges€v.€S.€C.€Toof€&€Co.óó,€833€S.W.2d€896,€901Ï(Tenn.€1992),€a€civil€case€in€which€the€Court€held€that€where€punitive€damagesÏare€sought,€the€defendant€has€a€right€to€have€a€bifurcated€trial€in€which€theÏissues€of€liability€and€compensatory€damages€are€resolved€before€the€issue€ofÏpunitive€damages€is€presented.€€€The€facts€and€circumstances€of€òòHodgesóó€areÏclearly€inapposite€to€the€present€case.€€ÌÌà àIn€short,€the€appellant€Brewer€has€failed€to€cite€any€case€from€this€or€anyÏother€jurisdiction€that€requires€a€bifurcated€trial€under€facts€similar€to€the€facts€inÏthis€case.€€We€believe€that€this€failure€to€city€authority€is€because€none€exists.€ÏFurthermore,€we€are€certainly€not€inclined€to€create€such€a€rule€of€criminalÏprocedure€by€judicial€fiat.ÌÌò òà àà àà àà àà àà àVIIó óÌà àThe€appellant€Frost€contends€that€the€evidence€adduced€at€trial€was€notÏsufficient€to€sustain€the€jury's€verdict€that€he€was€guilty€of€four€counts€ofÏobtaining€money€by€means€of€false€pretenses.× ƒ? ××  ×€€We€disagree.ÌÌà àThe€offense€of€"false€pretense"€was€defined€in€Tenn.€Code€Ann.€ðð€39„3„901€(repealed)€and€was€punishable€as€in€cases€of€larceny.€€In€òòState€v.€Arnoldóó,Ï719€S.W.2d€543€(Tenn.€Crim.€App.€1986),€this€Court€reiterated€the€elements€ofÏthis€offense€as€follows:ÌÓÓà8 à(1)€€the€making,€with€intent€to€defraud€of€a€false€representation€of€aÏpast€or€existing€fact;Ìà8 à(2)€€the€representation€was€calculated€to€deceive€the€person€toÏwhom€it€was€made€and€did€in€fact€deceive€that€person;Ìà8 à(3)€€the€false€pretense€was€capable€of€defrauding€;Ìà8 à(4)€€the€defendant€obtained€something€of€value€from€the€injuredÏperson€without€giving€just€compensation;ÌÒ ` ÒÒ ` Ò(5)€€the€thing€obtained€was€valued€at€more€than€or€less€thanÏ.€.€.€$200.00€.€.€.€(as€for€larceny,€the€value€will€determine€€theÏpunishment).ÌÌÒ   ÒÒ ° ÒÓÓòòId.óó€at€546€(citing€òòState€v.€Smithóó,€612€S.W.2d€493,€497€(Tenn.€Crim.€App.€1980)).€ÏThe€false€pretense€must€be€a€statement€of€some€existing€fact€and€not€a€mereÏpromise€to€do€something€in€the€future.€òòSmithóó,€612€S.W.2d€at€497€(citing€òòCanterÏv.€Stateóó,€75€Tenn.€349,€351€(1881)).€€However,€when€a€false€promise€is€coupledÏwith€a€false€statement€of€fact,€the€two€are€taken€together€as€a€fraudulentÏpretense.€òòSmithóó,€612€S.W.2d€at€497€(citing€òòCook€v.€Stateóó,€170€Tenn.€245,€94ÏS.W.2d€386,€388€(1936)).€€Moreover,€reliance€by€the€alleged€victim€upon€theÏfalse€pretense€is€not€required;€it€is€only€necessary€that€someone€relied€upon€theÏrepresentation€to€the€effect€that€the€alleged€victim€is€harmed.€òòHorn€v.€Stateóó,€553ÏS.W.2d€736,€737€(Tenn.€1977).€€Finally,€the€representation€is€not€required€to€beÏone€calculated€to€defraud€a€person€of€ordinary€prudence€and€caution.€òòBeck€v.ÏStateóó,€203€Tenn.€671,€676,€315€S.W.2d€254,€256€(Tenn.€1958).€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€Ìà àThe€principles€which€govern€this€court's€review€of€a€conviction€by€a€juryÏare€well€settled.€€This€court€must€review€the€record€to€determine€if€the€evidenceÏadduced€at€trial€was€sufficient€"to€support€the€finding€of€the€trier€of€fact€of€guiltÏbeyond€a€reasonable€doubt."€Tenn.€R.€App.€P.€13(e).€€This€rule€is€applicable€toÏdeterminations€of€guilt€predicated€upon€direct€evidence,€circumstantialÏevidence,€or€a€combination€thereof.€òòState€v.€Matthewsóó,€805€S.W.2d€776,€779Ï(Tenn.€Crim.€App.€1990).ÌÌà àIn€examining€the€sufficiency€of€the€evidence,€this€court€does€notÏreevaluate€the€weight€or€credibility€of€the€witnesses'€testimony€as€those€areÏmatters€entrusted€exclusively€to€the€jury€as€the€finders€of€fact.€òòState€v.€Sheffieldóó,Ï676€S.W.2d€542,€547€(Tenn.€1984);€òòState€v.€Wrightóó,€836€S.W.2d€130,€134Ï(Tenn.€Crim.€App.€1992).€€Nor€may€this€court€substitute€its€inferences€for€thoseÍdrawn€by€the€trier€of€fact€from€circumstantial€evidence.€òòLiakas€v.€Stateóó,€199ÏTenn.€298,€305,€286€S.W.2d€856,€859€(1956).ÌÌà àA€jury€verdict€of€guilty,€approved€by€the€trial€judge,€accredits€theÏtestimony€of€the€state's€witnesses€and€resolves€all€conflicts€in€favor€of€the€theoryÏof€the€state.€òòState€v.€Williamsóó,€657€S.W.2d€405,€410€(Tenn.€1983);€òòState€v.ÏHatchettóó,€560€S.W.2d€627,€630€(Tenn.€1978).€€On€appeal,€the€state€is€entitled€toÏthe€strongest€legitimate€view€of€the€evidence€and€all€reasonable€and€legitimateÏinferences€which€may€be€drawn€therefrom.€òòState€v.€Cabbageóó,€571€S.W.2d€832,Ï835€(Tenn.€1978).€€Moreover,€a€guilty€verdict€against€the€appellant€removes€theÏpresumption€of€innocence€and€raises€a€presumption€of€guilt€on€appeal,€òòState€v.ÏGraceóó,€493€S.W.2d€474,€476€(Tenn.€1973),€which€the€appellant€has€the€burdenÏof€overcoming.€òòState€v.€Brownóó,€551€S.W.2d€329,€330€(Tenn.€1977).ÌÌà àWhere€the€sufficiency€of€the€evidence€is€at€issue,€the€relevant€questionÏon€appeal€is€whether,€after€viewing€the€evidence€in€the€light€most€favorable€toÏthe€State,€any€rational€trier€of€fact€could€have€determined€that€the€essentialÏelements€of€the€crime€were€established€beyond€a€reasonable€doubt.€Tenn.€R.ÏApp.€P.€13(e);€òòJackson€v.€Virginiaóó,€443€U.S.€307,€314„324,€99€S.€Ct.€2781,Ï2786„2792,€61€L.Ed.2d€560€(1979).€€In€addition,€a€conviction€may€be€basedÏentirely€on€circumstantial€evidence€where€the€facts€are€"so€clearly€interwovenÏand€connected€that€the€finger€of€guilt€is€pointed€unerringly€at€the€[appellant]€andÏthe€[appellant]€alone."€òòState€v.€Crawfordóó,€225€Tenn.€478,€484,€470€S.W.2d€610,Ï612€(1971).ÌÌà àIn€the€present€case,€the€appellants€induced€prospective€investors€to€payÏinflated€prices€for€specialty€items€by€representing€to€them€that€a€substantialÏportion€of€the€excess€money€from€the€sales€would€be€set€aside€for€theÏestablishment€and€stocking€of€the€wholesale€club€store.€€Testimony€at€trialÏrevealed€that€one€of€the€primary€purposes€of€the€product€purchasers€wasÏindeed€to€contribute€capital€toward€the€wholesale€club€store,€the€opening€ofÏwhich€they€hoped€would€provide€them€with€sizeable€profits.ÌÌà àBank€records€of€the€corporation,€however,€exhibited€that€the€money€thatÏindividuals€had€paid€for€their€products€was€deposited€into€the€general€bankÏaccount€of€the€company.€€It€was€then€utilized€to€pay€operating€expenses€andÏundisclosed€commissions,€as€well€as€"overrides"€and€royalties€to€theÏappellants,€their€families,€and€their€individual€creditors.€€In€short,€none€of€theÏproceeds€from€the€sales€of€specialty€products€were€ever€set€aside€for€theÏopening€or€stocking€of€the€store.ÌÌà àIn€addition,€as€part€of€a€scheme€to€project€an€air€of€success,€theÏappellants€told€prospective€members€that€Faron€Young€was€a€director€of€theÏcorporation€when,€in€fact,€he€was€not.€€They€told€stories€of€success€with€similarÏventures€in€other€states,€but€failed€to€disclose€the€legal€difficulties€encounteredÏin€the€other€jurisdictions.€€Through€the€use€of€these€tactics,€many€individualsÏwere€ensnared.ÌÌà àThus,€there€was€ample,€indeed€overwhelming,€evidence€from€which€anyÏrational€finder€of€fact€could€determine€that€the€appellants€were€guilty€of€all€of€theÍelements€of€obtaining€personal€property€under€false€pretense€beyond€aÏreasonable€doubt.€Tenn.€R.€App.€Proc.€13(e);€òòJackson€v.€Virginiaóó,€supra.€€TheÏissue€is€without€merit.ÌÌà@ àò òVIIIó óÌà àAs€previously€noted,€one€of€the€victims€of€the€investment€schemeÏestablished€by€the€appellants€was€Faron€Young,€a€world„famous€country€musicÏartist.€€The€appellant€Frost€was€charged€in€Counts€19,€20,€and€21€of€theÏindictment€in€connection€with€the€sale€of€securities€to€Mr.€Young.€€At€trial,€Mr.ÏYoung€testified€that€he€dealt€exclusively€with€an€individual€named€BobbyÏFraizer€in€his€purchase€of€stock€in€the€corporation,€and€that€he€had€no€contactÏwith€the€appellant€Frost€at€any€time.ÌÌà àAfter€stating€that€there€was€no€proof€that€the€appellant€Frost€participatedÏin€or€had€any€knowledge€of€the€sale€of€stock€to€Mr.€Young,€the€trial€judgeÏgranted€a€judgment€of€acquittal€concerning€Counts€19€and€20.€€However,€theÏtrial€judge€permitted€Count€21€to€be€presented€to€the€jury€and€the€appellantÏFrost€was€convicted€on€that€count.€€He€now€contends€that€it€was€error€for€the€trialÏcourt€to€refuse€to€grant€a€judgment€of€acquittal€concerning€Count€21€whichÏcharged€him€with€omitting€to€state€material€facts€in€the€sale€of€the€securities€toÏMr.€Young.€€The€appellant€Frost€presents€his€contention€in€the€form€of€aÏsufficiency€of€the€evidence€challenge.× ƒ@ ××  ×ÌÌà àReview€of€the€record€reveals€that€counsel€for€the€appellant€Frost€failed€toÏpoint€out€to€the€court€the€relation€between€Count€21€and€Counts€19€and€20.€ÏUnder€some€circumstances€this€could€have€constituted€waiver.€€However,€givenÏthe€trial€court's€finding€that€no€proof€was€introduced€that€the€appellant€FrostÏparticipated€in€or€had€knowledge€of€the€transaction€with€Mr.€Young,€the€trialÏcourt's€failure€to€grant€a€judgment€of€acquittal€on€Count€21€rose€to€the€level€ofÏplain€error.€òòSeeóó€òòState€v.€Ogleóó,€666€S.W.2d€58,€60€(Tenn.€1984);€Tenn.€R.€Crim.ÏProc.€52(b);€òòsee€alsoóó€Tenn.€R.€App.€Proc.€36(a).€€In€short,€the€facts€contained€inÏthe€record€and€any€inferences€which€may€be€reasonably€drawn€from€the€factsÏare€insufficient,€as€a€matter€of€law,€for€a€rational€trier€of€fact€to€find€the€appellantÏFrost€guilty€beyond€a€reasonable€doubt€on€Count€21.€òòState€v.€Tuggleóó,€639ÏS.W.2d€913,€914€(Tenn.€1982).€€Accordingly,€we€reverse€the€trial€court€andÏdismiss€the€conviction€under€Count€21.€× ƒA ××  ×ÌÌà@ àò òIXó óÌà àCount€One€of€the€indictment€charged€the€appellant€Frost€with€engagingÏin€a€scheme€to€defraud€in€connection€with€the€sale€of€securities.€€The€appellantÏcontends€that€Count€One€was€comprehensive€of€all€of€his€participation€in€theÏenterprise,€both€before€and€after€the€Commissioner€of€Insurance€ordered€theÏappellants€to€cease€and€desist.€€He€asserts€that€all€of€the€remaining€counts€ofÏthe€indictment€were€simply€restatements€of€particular€portions€of€Count€One.€ÏHaving€been€convicted€on€Count€One,€the€appellant€Frost€argues€that€all€of€theÏremaining€counts€on€which€he€was€found€guilty€were€multiplicitous€and,Ítherefore,€all€counts€except€Count€One€should€have€been€dismissed€by€the€trialÏcourt.ÌÌà àThe€anti„fraud€provisions€of€the€Tennessee€Securities€Act€provide€that:ÌÓÓà8 àIt€is€unlawful€for€any€person€in€connection€with€the€sale€orÏpurchase€of€any€security€in€this€state,€directly€or€indirectly:Ìà8 à€€(1)€€To€employ€any€device,€scheme,€or€artifice€to€defraud;Ìà8 à€€(2)€€To€make€any€untrue€statement€of€a€material€fact€or€to€omit€toÏstate€a€material€fact€necessary€in€order€to€make€the€statementsÏmade,€in€the€light€of€the€circumstances€under€which€they€areÏmade,€not€misleading;€orÌà8 à€€(3)€€To€engage€in€any€act,€practice,€or€course€of€business€whichÏoperates€or€would€operate€as€a€fraud€or€deceit€upon€any€person.ÌÌÓÓTenn.€Code€Ann.€ðð€48„2„121(a).€€In€Count€One,€the€appellant€Frost€wasÏcharged€with€violating€Tenn.€Code€Ann.€ðð€48„2„121(a)(1).€€In€Counts€5,€8,€ll,€l4,Ïl7,€and€2l,€the€appellant€Frost€was€charged€with€violating€Tenn.€Code€Ann.€ðð€48„2„121(a)(2).€€While€there€are€no€Tennessee€cases€holding€that€the€threeÏsubdivisions€of€€Tenn.€Code€Ann.€ðð€48„2„121(a)€constitute€separate€and€distinctÏoffenses,€other€jurisdictions€with€similar€provisions€have€so€held.ÌÌà àFor€example,€the€provisions€in€ðð€77(q)€of€the€federal€Securities€Act€ofÏ1933€are€nearly€identical€in€all€relevant€aspects€to€the€anti„fraud€provisions€ofÍthe€Tennessee€Securities€Act.× ƒB ××  ×€€Construing€these€provisions,€the€federal€courtsÏhave€held€that:ÌÓÓà8 àBecause€the€three€subdivisions€of€ðð€77(q)(a)€express€the€statutoryÏpurpose€of€making€the€acts€specified€in€those€subdivisionsÏseparate€and€distinct,€there€is€strong€logic€to€the€view€that€each€ofÏthe€different€acts€defined€in€those€subdivisions€can€serve€as€anÏ"allowable€unit€of€prosecution."€.€.€.€The€distinctions€between€theÏthree€subdivisions€may€seem€esoteric€because€they€entail€hairlineÏdifferences€of€proof.€€But€Congress,€who€deliberately€made€theÏdistinctions,€evidently€did€not€think€them€so.€€And€experience€withÏcriminal€trials€demonstrates€that€the€unexpected€frequentlyÏhappens.ÌÌÓÓòòUnited€States€v.€Birrelóó,€266€F.€Supp.€539,€543€(S.D.€N.Y.€1967)(citationsÏomitted).€€In€òòUnited€States€v.€Naftalinóó,€the€United€States€Supreme€Court€citedÏthe€òòBirrelóó€decision€with€approval.€441€U.S.€768,€774,€99€S.€Ct.€2077,€2082,€60ÏL.Ed.€624€(1979).ÌÌà àWhere€the€same€actions€or€transactions€constitute€a€violation€of€two€orÏmore€distinct€statutory€provisions,€the€standard€for€determining€"whether€thereÏare€[multiple]€offenses€or€only€one€is€whether€each€provision€requires€proof€ofÏan€additional€fact€which€the€other€does€not."€òòBlockberger€v.€United€Statesóó,€284ÏU.S.€299,€304,€52€S.€Ct.€180,€182,€76€L.Ed.€306€(1932);€òòState€v.€Blackóó,€524ÏS.W.2d€913,€919€(Tenn.€1975).€€"As€òòBlockbergeróó€and€other€[double€jeopardy]Ïdecisions€applying€its€principle€reveal€.€.€.€the€Court's€application€of€the€testÍfocuses€on€the€statutory€elements€of€the€offense."€òòState€v.€Anthonyóó,€817€S.W.2dÏ299,€303€(Tenn.€1991),€quoting€òòIannelli€v.€United€Statesóó,€420€U.S.€770,€785,€95ÏS.€Ct.€1284,€1293,€43€L.Ed.2d€616€(1975).€€Thus,€it€is€clear€that€the€crucialÏinquiry€is€not€whether€the€factual€allegations€proffered€in€various€counts€of€theÏindictment€overlap,€but€whether€the€various€counts€require€proof€of€the€sameÏfacts.€€ÌÌà àHere,€in€Count€One€the€appellant€Frost€was€convicted€of€employing€aÏscheme€to€defraud€in€connection€with€the€sale€of€securities.€€The€existence€of€aÏ"scheme€to€defraud"€had€to€be€proven€to€establish€that€the€offense€had€beenÏcommitted.€€Counts€5,€8,€ll,€l4,€l7€and€2l€did€not€require€proof€of€a€scheme€toÏdefraud.€€Instead,€those€six€counts€which€charged€that€the€appellant€FrostÏomitted€to€state€material€facts€in€connection€with€the€sale€of€a€security€requiredÏproof€of€specific€omissions€and€also€that€the€omissions€occurred€concerning€theÏparticular€victim€named€in€each€count.€€Conversely,€Count€One€did€not€requireÏproof€of€those€particular€omissions€or€those€victims€in€order€to€establish€that€theÏappellant€Frost€employed€a€scheme€to€defraud.€òòSeeóó€òòUnited€States€v.€Stullóó,€743ÏF.2d€439,€442€n.2€(6th€Cir.€1984);€òòUnited€States€v,€Beecroftóó,€608€F.2d€753,€757Ï(9th€Cir.€1979);€òòUnited€States€v.€Stirlingóó,€571€F.2d€708,€728„29€(2nd€Cir.),€òòcert.Ïdeniedóó,€439€U.S.€824,€99€S.€Ct.€93,€58€L.Ed.2d€116€(1978).€€Count€OneÏencompassed€numerous€victims€and€various€aspects€of€the€scheme€that€wereÏnot€alleged€in€the€material€omissions€counts.ÌÌà àSimilarly,€in€Count€Two€the€appellant€Frost€was€convicted€of€sellingÏsecurities€without€a€license.€€Evidence€that€the€appellant€Frost€was€sellingÍsecurities€without€a€license,€while€essential€to€Count€Two,€was€unnecessary€forÏconviction€under€Count€One.€€Furthermore,€proof€of€any€type€of€scheme€toÏdefraud€was€not€required€for€a€guilty€verdict€under€Count€Two,€since€even€oneÏselling€securities€otherwise€legitimately€could€be€convicted€of€that€offense€if€notÏproperly€licensed.ÌÌà àIn€Count€Three€the€appellant€Frost€was€convicted€of€violating€an€Order€ofÏthe€Commissioner€of€Commerce€and€Insurance.€€Proof€that€the€appellant€FrostÏviolated€the€cease€and€desist€order€was€necessary€for€a€conviction€on€CountÏThree,€but€it€was€unnecessary€for€conviction€under€any€of€the€other€counts€ofÏthe€indictment.€€Moreover,€a€showing€of€a€scheme€to€defraud€is€not€a€requisiteÏelement€for€a€conviction€on€Count€Three.ÌÌà àThe€appellant€Frost€was€convicted€on€Counts€6,€9,€l2,€l5€and€l8€for€sellingÏunregistered€securities.€€Evidence€establishing€that€the€securities€which€wereÏsold€were€unregistered€was€a€requisite€element€of€each€of€those€counts.€€SuchÏproof€was€not,€on€the€other€hand,€necessary€for€conviction€under€Count€One.€ÏLikewise,€none€of€those€counts€required€a€showing€of€a€scheme€to€defraud€inÏconnection€with€the€sale€of€securities,€whereas€such€proof€was€paramount€to€aÏconviction€under€Count€One.ÌÌà àLastly,€all€of€the€above€securities„related€counts,€including€Count€One,Ïrequire€proof€that€the€appellant€Frost€sold€a€"security"€in€Tennessee.€€However,Ïthat€is€not€a€fact€that€needed€to€be€proven€under€the€false€pretenses€counts,€4,Ïl0,€l3€and€l6.€€The€false€pretenses€counts€require€proof€that€the€appellant€FrostÍobtained€money€through€the€false€representation€of€a€past€or€existing€fact,Ïwhereas€Count€One€does€not.€€Further,€proof€that€the€false€representation€wasÏcapable€of€defrauding€is€necessary€for€conviction€on€the€false€pretenses€counts,Ïbut€is€not€an€element€under€the€Securities€Act,€which€Count€One€alleged€wasÏviolated.ÌÌà àIn€short,€each€of€the€various€counts€on€which€the€appellant€Frost€wasÏconvicted€required€proof€of€facts€which€were€unnecessary€for€conviction€underÏother€counts€of€the€indictment.€òòSeeóó€òòBlockburgeróó,€284€U.S.€at€304,€52€S.€Ct.€atÏ182;€òòBlackóó,€524€S.W.2d€at€919.€€Accordingly,€the€convictions€were€notÏmultiplicitous.ÌÌà àWe€conclude€by€noting€that€the€appellant€Frost's€reliance€upon€the€caseÏof€òòState€v.€O'Guinóó,€641€S.W.2d€894€(Tenn.€Crim.€App.€1982)€is€misplaced.€€InÏòòO'Guinóó,€six€automobiles€were€stolen€from€a€single€victim€in€one€general€schemeÏand€this€Court€found€that€the€six€larceny€convictions€merged€into€a€singleÏconviction.€òòId.óó€at€898.€€In€the€present€case,€by€contrast,€various€individuals€wereÏvictimized€by€the€investment€scheme€implemented€by€the€appellant€Frost€andÏothers.€€Moreover,€the€appellant€Frost€was€indicted€for€violation€of€more€thanÏone€statutory€provision.ÌÌà àThis€issue€has€no€merit.ÌÌà@ àò òXó óÌà àDuring€the€case„in„chief€of€the€prosecution,€the€State€introducedÏevidence€concerning€prior€financial,€legal€and€regulatory€difficulties€previouslyÏexperienced€by€the€appellant€Frost€in€other€states.€€This€evidence€includedÏproof€of€financial€failures€which€ended€in€bankruptcies,€civil€injunctions,€andÏcriminal€convictions€concerning€ventures€substantially€similar€to€the€oneÏinvolved€in€the€present€case.× ƒC ××  ×€€The€general€rule€concerning€such€evidence€isÏthat€it€is€inadmissible€even€when€the€previous€crimes€or€acts€are€of€the€sameÏcharacter€as€the€charged€offense€because€such€evidence€is€irrelevant€andÏinvites€the€"finder€of€fact€to€infer€guilt€from€propensity."€òòState€v.€Hallockóó,€875ÏS.W.2d€285,€290€(Tenn.€Crim.€App.€1993);€òòaccordóó€òòState€v.€Partonóó,€694€S.W.2dÏ299,€302€(Tenn.€1985);€òòBunch€v.€Stateóó,€605€S.W.2d€227,€229€(Tenn.€1980);€òòLeeÏv.€Stateóó,€194€Tenn.€652,€654,€254€S.W.2d€747,€747€(1953);€òòMays€v.€Stateóó,€145ÏTenn.€118,€140,€238€S.W.€1096,€1102€(1921).€€Moreover,€"[e]vidence€of€otherÏcrimes,€wrongs,€or€acts€is€not€admissible€to€prove€the€character€of€a€person€inÏorder€to€show€action€in€conformity€with€the€character€trait."€Tenn.€R.€Evid.Ï404(b).ÌÌà àThere€are,€however,€exceptions€to€this€general€prohibition,× ƒD ××  ×€two€ofÏwhich€the€trial€court€relied€upon€in€admitting€the€evidence.€€First,€the€lower€courtÍfound€that€the€evidence€was€admissible€to€prove€the€appellants'€intent€andÏguilty€knowledge.× ƒE ××  ×€€The€second€ground,€which€the€trial€court€found€to€be€theÏmost€significant,€was€that€the€evidence€went€to€prove€an€element€of€the€crime€inÏthat€the€appellants€failed€to€disclose€material€facts€to€purchasers€of€the€specialtyÏproducts.€€The€appellant€Frost€challenges€those€findings€on€several€bases.ÌÌà@ àò òAó óÌà àIn€the€first€portion€of€a€bifurcated€relevancy€challenge,€the€appellant€FrostÏcontends€that€the€civil€injunctions€and€criminal€conviction€are€too€remote€in€timeÏto€have€been€relevant€to€this€case€in€that€all€of€the€injunctions€and€the€criminalÏconviction€occurred€at€least€ten€years€prior€to€this€case.€€In€support€of€his€theoryÏhe€cited€several€cases€in€his€brief€in€which€evidence€of€prior€crimes€thatÏoccurred€between€two€and€eleven€years€before€the€charged€offense€wereÏexcluded€on€grounds€of€remoteness.× ƒF ××  ×€€Moreover,€because€such€evidence€isÏinherently€prejudicial,€its€admission€often€requires€the€reversal€of€the€convictionÏand€a€new€trial.€òòState€v.€Partonóó,€694€S.W.2d€at€302€(Tenn.€1985);€òòBunch€v.ÏStateóó,€605€S.W.2d€227,€229€(Tenn.€1984).€€While€we€are€mindful€of€theseÍdecisions,€other€cases€make€it€clear€that€the€character€and€intricacies€of€fraudÏcases€often€require€slight€modification€of€general€evidentiary€rules€in€order€toÏadminister€justice.€€In€òòPerritt€v.€Perrittóó,€the€Court€stated:ÌÓÓà8 àFraud€assumes€many€shapes,€disguises€and€subterfuges,€and€isÏgenerally€so€secretly€hatched€that€it€can€only€be€detected€by€aÏconsideration€of€facts€and€circumstances,€which€are€frequentlyÏtrivial,€remote€and€disconnected,€and€which€cannot€be€interpretedÏwithout€bringing€them€together,€and€contemplating€them€all€in€oneÏview.€€In€order€to€do€this€it€is€necessary€to€pick€one€fact€orÏcircumstance€here,€another€there,€and€a€third€yonder,€until€theÏcollection€is€complete...A€wide€latitude€of€evidence€is€allowed;€andÏif€a€fact€or€circumstance€relates€directly,€or€indirectly,€to€theÏtransaction,€it€is€admissible,€however€weak€or€slight€it€may€be,€itsÏrelevance€depending€not€upon€its€weight€or€force,€but€upon€itsÏbearing€or€tendency.ÌÌÓÓ528€S.W.2d€561,€566€(Tenn.€App.€1973)(quoting€Gibson's€Suits€in€Chancery,€ððÏ456€(5th€ed.€1955).€€In€òòState€v.€Kenneróó,€640€S.W.2d€5l,€55€(Tenn.Crim.App.Ïl982),€this€Court€recognized€the€unique€nature€of€fraud€cases€when€it€held€thatÏ"[m]ore€remote€evidence€is€admissible€as€relevant€in€fraud€cases€than€isÏgenerally€admissible€in€other€cases."€€€Given€the€facts€and€circumstances€of€theÏpresent€case,€and€the€nature€of€the€charges€against€the€appellant€Frost,€€weÏhold€that€the€evidence€of€prior€injunctions€and€the€conviction€was€not€so€remoteÏas€to€be€irrelevant.× ƒG ××  ×ÌÌà àThe€appellant€Frost€further€challenges€the€relevancy€of€the€prior€civilÏinjunctions€and€the€criminal€conviction,€at€least€insofar€as€the€evidence€wasÏadmitted€to€show€intent€and€guilty€knowledge,€on€a€second€theory.€€He€relies€onÍthe€ground€that€where€the€government€has€a€strong€case€on€the€issue€of€intent,Ïextrinsic€evidence€of€prior€crimes€should€be€excluded,€citing€òòUnited€States€v.ÏBeechumóó,€582€F.2d€898€(5th€Cir.€1978)€and€several€cases€from€this€state€whichÏare€not€as€factually€similar€to€the€present€case.€€We€respectfully€disagree.€€€€ÌÌà àThe€evidence€of€the€prior€injunctions€and€criminal€convictions€wasÏsignificant€and€reasonably€necessary€to€proving€beyond€a€reasonable€doubtÏthat€the€appellants€violated€the€securities€laws€with€the€requisite€intent.€ÏSpecifically,€the€evidence€was€relevant€to€show€that€the€appellants€had€guiltyÏknowledge€that€the€interests€they€were€selling€were€securities;€that€theÏappellants€knew€they€were€required€to€register€with€the€Securities€Division;€andÏthat€the€appellants€knew€they€were€required€to€fully€disclose€and€intentionallyÏfailed€to€disclose€to€potential€participants€their€prior€civil€injunctions€andÏcriminal€convictions€when€representing€their€prior€successes.€€In€suchÏcircumstances,€it€is€well€settled€that€"evidence€of€other€crimes€or€acts€ofÏmisconduct€may€be€introduced€for€.€.€.€limited€purposes,€such€as€to€show€guiltyÏknowledge€or€intent."€òòState€v.€Frazieróó,€683€S.W.2d€346,€350€(Tenn.€Crim.€App.Ï1984)(citation€omitted);€òòseeóó€òòState€v.€Littleóó,€854€S.W.2d€643,€649€(Tenn.€Crim.ÏApp.€1992).€€Moreover,€the€appellant€Frost€has€failed€to€make€any€references€toÏthe€record€to€support€his€contention€that€the€prosecution€had€a€strong€caseÏconcerning€the€issues€of€intent€and€guilty€knowledge€separate€and€distinct€fromÏthe€evidence€in€question.€€€ÌÌà àOther€jurisdictions€have€held€that€evidence€of€similar€crimes€and€otherÏwrongs€may€be€admitted€to€establish€intent€in€cases€involving€the€sale€ofÍsecurities.€òòE.g.óó,€òòHardcastle€v.€Stateóó,€755€S.W.2d€228€(Ark.€Ct.App.Ï1988)(evidence€of€an€injunction€issued€against€the€defendant€in€a€similarÏunrelated€securities€case€was€properly€admitted€to€prove€an€intent€to€defraudÏand€lack€of€mistake€in€a€securities€fraud€prosecution);€òòShappley€v.€Stateóó,€520ÏS.W.2d€766,€771€(Tex.€Crim.€App.€1974)(evidence€of€other€sales€of€securities€byÏthe€accused€was€properly€admitted€to€prove€intent€and€guilty€knowledge€in€aÏprosecution€for€securities€fraud€and€selling€securities€while€not€registered).× ƒH ××  ×€ÏFor€all€of€the€foregoing€reasons,€this€issue€has€no€merit.ÌÌà@ àò òBó óÌà àThe€appellant€Frost€alternatively€contends€that€even€if€the€prior€civilÏinjunctions€and€the€criminal€conviction€are€relevant,€the€probative€value€of€theÏevidence€was€outweighed€by€the€unfair€prejudice€to€him€in€having€the€evidenceÏbefore€the€jury.€€In€his€brief,€he€states€that€the€prejudice€in€this€case€is€"self„evident."€€Relying€on€òòHarrison€v.€Stateóó,€455€S.W.2d€6l7,€6l9€(Tenn.€l970),€heÏfurther€argues€that€the€trial€court's€limiting€instruction€to€the€jury€concerning€theÏpurposes€for€which€the€jury€could€use€the€evidence€was€an€"unmitigated€fiction"Ïgiven€the€strength€of€the€evidence€of€prior€wrongs.€ÌÌà àPursuant€to€Tenn.€R.€Evid.€404(b)(3),€a€court€must€exclude€"evidence€if€itsÏprobative€value€is€outweighed€by€the€danger€of€unfair€prejudice."€òòAccordóó€òòStateÏv.€Partonóó,€694€S.W.2d€at€302€(Tenn.€1985).€€The€determination€of€€"the€probativeÏof€the€evidence€is€within€the€discretion€of€the€trial€judge,€whose€determinationÏwill€not€be€overturned€absent€an€abuse€of€that€discretion."€òòState€v.€Hudsonóó,€No.Í03C01„9201„CR„9,€slip€op.€at€4€(Tenn.€Crim.€App.€1992)(citing€òòState€v.€Leathóó,Ï744€S.W.2d€591,€593€(Tenn.€Crim.€App.€1987)).€€As€stated€earlier,€the€trial€courtÏadmitted€the€evidence€on€two€grounds:€€(1)€because€it€tended€to€show€the€intentÏand€guilty€knowledge€of€the€appellants€and€(2)€because€it€was€necessary€toÏestablish€an€element€of€several€offenses€which€concerned€the€omission€ofÏmaterial€facts€to€potential€and€actual€participants.€€Concerning€intent€and€guiltyÏknowledge,€this€was€the€primary€evidence€that€the€State€relied€upon€at€trial€toÏprove€that€the€appellants€knew€that€they€were€selling€securities€in€violation€ofÏsecurities€laws€prior€to€the€issuance€of€the€cease€and€desist€order.€€TheÏappellant€Frost€contends€that€his€criminal€intent€was€sufficiently€established€byÏother€evidence€at€trial€and,€therefore,€the€evidence€of€prior€wrongs€is€of€scantÏprobative€value.€€However,€as€previously€noted,€he€fails€to€make€any€referencesÏto€such€other€evidence€in€his€brief.€€ÌÌà àIn€regard€to€the€second€ground€on€which€the€trial€court€admitted€theÏevidence,€it€is€clear€that€if€the€lower€court€had€not€admitted€the€evidence,€theÏcounts€alleging€that€the€appellants€failed€to€disclose€material€facts€to€potentialÏand€actual€investors€would€have€had€to€be€dismissed.€€This€is€due€to€the€factÏthat€the€prior€conviction€and€civil€injunctions€were€the€primary€facts€that€theÏState€claimed€the€appellants€had€a€duty€to€reveal€in€order€to€avertÏmisrepresenting€their€prior€successes€in€similar€ventures.ÌÌà àIn€short,€although€the€admission€of€the€evidence€could€have€causedÏsome€quantum€of€prejudice€to€the€appellant€Frost,€òòSeeóó;€òòBunch€v.€Stateóó,€605ÏS.W.2d€227,€229€(Tenn.€1984),€the€evidence€was€paramount€to€proving€anÍessential€element€of€the€crimes€charged€in€several€counts€of€the€indictment€andÏwas€of€major€significance€on€the€issue€of€intent.€€Moreover,€the€trial€courtÏfollowed€the€procedures€mandated€by€Tenn.€R.€Evid.€404(b)€in€admitting€theÏevidence€and€gave€an€appropriate€limiting€instruction€to€the€jury€concerning€theÏcontext€in€which€the€evidence€could€be€considered.€€Under€such€circumstances,Ïthis€Court€does€not€find€that€the€trial€judge€abused€his€discretion€in€admitting€theÏevidence.ÌÌà@ àò òCó óÌà àIn€a€second€alternative€argument,€the€appellant€Frost€insists€that€even€ifÏthe€evidence€was€admissible,€the€procedural€method€by€which€it€was€presentedÏto€the€jury€was€improper.€€Specifically,€he€contends€that€the€trial€should€have€Ïbifurcated€the€trial€so€that€evidence€of€prior€wrongs€would€come€in€only€in€theÏsecond€phase,€after€the€jury€had€made€a€determination€in€the€first€phase€thatÏthe€enterprise€involved€the€sale€of€securities.€€In€support€of€his€contention,€heÏcites€òòHarrison€v.€Stateóó,€394€S.W.2d€713€(Tenn.€1965)€and€òòState€v.€Warróó,€604ÏS.W.2d€66€(Tenn.€Crim.€App.€1980).€€Both€of€those€cases€are€inapposite€to€theÏpresent€case€and,€therefore,€do€not€mandate€a€bifurcated€trial€in€thisÏprosecution.€ÌÌà àòòHarrisonóó€deals€with€habitual€criminal€statutes€and€involves€theÏenhancement€of€punishment€for€the€triggering€offense€in€light€of€prior€crimes.Ï394€S.W.2d€at€714„18.€€In€such€cases,€the€prior€crimes€are€used€solely€toÏestablish€that€the€defendant€is€an€habitual€criminal€and€in€no€way€concerns€theÏtriggering€offense€with€which€he€is€charged.€€Although€òòWarróó€was€not€a€habitualÍcriminal€case,€the€practical€effect€of€the€statute€at€issue€was€the€same€as€theÏhabitual€criminal€statute.€€There€the€charge€for€carrying€a€firearm€was€increasedÏfrom€a€misdemeanor€to€a€felony€in€a€second€phase€of€the€trial€because€of€theÏdefendant's€status€as€a€convicted€felon.€604€S.W.2d€at€67„68.€€By€contrast,€theÏevidence€of€prior€wrongs€offered€in€the€present€case€was€vital€concerningÏnumerous€counts€to€show€guilty€knowledge,€intent,€and€the€failure€of€theÏappellants€to€disclose€material€facts€to€prospective€and€actual€participants.€ÏThose€issues€were€so€intertwined€with€and€essential€to€the€determination€of€theÏguilt€or€innocence€of€the€appellants€that€it€would€be€impossible€to€partition€theÏproof€thereon€from€the€remaining€evidence.ÌÌà àMoreover,€nothing€in€Tenn.€R.€Evid.€404(b)€requires€courts€to€bifurcateÏtrials€when€evidence€of€prior€wrongs€is€admitted.€€Instead,€the€Supreme€CourtÏand€the€legislature,€relying€heavily€upon€the€Tennessee€Supreme€Court'sÏholding€in€òòState€v.€Partonóó,€694€S.W.2d€at€302,€enacted€other€safeguards€in€RuleÏ404(b),€Tenn.R.Evid.,€to€protect€the€rights€of€criminal€defendants€and€the€trialÏcourt€diligently€complied€with€all€of€the€requirements€of€Rule€404(b).€€InÏdischarging€those€tasks,€the€judge€reserved€judgment€on€the€admissibility€of€theÏevidence€until€the€last€possible€moment€in€the€state's€case„in„chief€in€order€toÏbe€certain€that€the€probative€value€of€the€evidence€was€not€outweighed€by€theÏdanger€of€unfair€prejudice€to€the€appellants.€€The€trial€judge€also€instructed€theÏjury€concerning€the€limited€purposes€for€which€the€evidence€could€be€used,Ïboth€at€the€time€the€evidence€was€admitted€and€again€in€the€final€charge€to€theÏjury.€€After€a€full€and€complete€examination€of€those€facts€and€circumstances,Ïwe€find€no€error€in€the€trial€court's€refusal€to€bifurcate€the€trial.ÌÌà àThese€issues€are€without€merit.ÌÌà@ àò òXIó óÌà àNext€the€appellant€Frost€argues€that€he€was€denied€due€process€by€theÏfailure€of€the€trial€court€to€require€the€State€to€disclose€certain€exculpatoryÏstatements€to€him.× ƒI ××  ×€€In€òòBrady€v.€Marylandóó,€373€U.S.€83,€87,€83€S.Ct.€ll94,€ll96„97,€l0€L.Ed.2d€2l5€(l963),€the€United€States€Supreme€Court€held€that€theÏprosecution€has€a€compelling€duty€to€furnish€the€accused€any€evidence€whichÏis€favorable€to€the€accused€and€material€to€his€guilt€or€punishment,€irrespectiveÏof€the€good€or€bad€faith€of€the€prosecution.€òòSeeóó€òòWorkman€v.€Stateóó,€868€S.W.2dÏ705,€709€(Tenn.€Crim.€App.€1993).€€In€òòUnited€States€v.€Bagleyóó,€473€U.S.€667,Ï676,€l05€S.Ct.€3375,€3380,€87€L.Ed.2d€48l€(l985),€the€Supreme€Court€held€thatÏboth€exculpatory€and€impeachment€evidence€fall€under€the€òòBradyóó€rule.€ÌÌà àBefore€an€accused€is€entitled€to€relief€under€this€theory,€he€mustÏestablish€several€prerequisites:€€(a)€the€prosecution€must€have€suppressed€theÍevidence;€(b)€the€evidence€suppressed€must€have€been€favorable€to€theÏaccused;€and€(c)€the€evidence€must€have€been€material.€òòSeeóó€òòUnited€States€v.ÏBagleyóó,€òòIdóó.,€473€U.S.€674„75,€105€S.€Ct.€3379„80;€òòUnited€States€v.€Agursóó,€427ÏU.S.€97,€104,€96€S.€Ct.€2392,€2397,€49€L.€Ed.2d€342€(1976);€òòBrady€v.€Marylandóó,Ï373€U.S.€at€87,€83€S.€Ct.€at€1196„97;€òòWorkman€v.€Stateóó,€868€S.W.2d€at€709;ÏòòState€v.€Marshallóó,€845€S.W.2d€228,€232€(Tenn.€Crim.€App.€1992);€òòStrouth€v.ÏStateóó,€755€S.W.2d€819,€828€(€Tenn.€Crim.€App.€1986).€€In€òòState€v.€Spurlockóó,€thisÏCourt€recognized€a€fourth€prerequisite€to€relief:€€"the€accused€must€make€aÏproper€request€for€the€production€of€the€evidence,€unless€the€evidence,€whenÏviewed€by€the€prosecution,€is€obviously€exculpatory€in€nature€and€will€beÏhelpful€to€the€accused."€874€S.W.2d€602,€609€(Tenn.€Crim.€App.€1993)(citationsÏomitted).ÌÌà àExamination€of€the€suppressed€evidence€revealed€informationÏconcerning€three€individuals€or€situations.€€First,€there€was€an€affidavit€from€anÏattorney€explaining€his€withdrawal€from€representation€due€to€the€surfacing€ofÏconflicting€interests€between€two€defendants€he€was€representing€in€the€case.€ÏNext,€there€was€a€tape€recording€of€a€conversation€that€took€place€in€the€trialÏjudge's€chambers€in€which€a€defendant€in€the€case€explained€to€the€judge€whyÏhe€€intended€to€conduct€a€pro€se€defense€for€the€remainder€of€the€trial.€€NeitherÏof€those€items€of€information€were€favorable,€or€even€relevant,€to€the€guilt€orÏinnocence€of€the€appellant€Frost.€€The€final€undisclosed€material€consisted€of€aÏpetition€for€divorce€filed€against€a€witness€for€the€prosecution,€the€final€decree€ofÏdivorce,€and€a€civil€action€for€damages€concerning€injuries€sustained€by€theÏwitness'€child€at€school.€€The€only€portion€of€those€documents€that€couldÍpossibly€have€been€subject€to€the€€òòBradyóó€rule€was€found€in€the€petition€forÏdivorce€where€it€was€alleged€that€the€witness€for€the€prosecution€had€previouslyÏhad€her€husband€and€his€family€members€arrested€on€false€charges.× ƒJ ××  ×ÌÌà àWhile€this€Court€can€envision€how€such€information,€if€substantiated,Ïcould€have€been€valuable€impeachment€evidence,€the€appellant€Frost's€dueÏprocess€rights€were€not€violated€under€a€òòBradyóó€theory€unless€he€can€establishÏthe€prerequisites€heretofore€set€forth.€€We€believe€that€such€is€not€possible.€ÏFirst,€concerning€whether€the€prosecution€suppressed€the€evidence,€it€isÏsignificant€that€the€allegations€were€levied€in€a€document€filed€in€a€court.€€SuchÏdocuments€are€a€matter€of€public€record€and€may€be€obtained€by€anyone.€ÏWhere€impeachment€evidence€is€equally€available€to€the€accused€and€theÏprosecution,€the€responsibility€for€the€failure€of€the€accused€to€discover€it€mustÏbe€borne€by€the€accused.€òòWorkmanóó,€868€S.W.2d€at€709.€€In€addition,€althoughÏthe€evidence€would€arguably€be€favorable€for€the€appellant€Frost,€it€is€notÏ"material"€for€purposes€of€the€òòBradyóó€rule.€€In€òòUnited€States€v.€Bagleyóó,€the€CourtÏstated:€ÌÓÓà8 àThe€evidence€is€material€only€if€there€is€a€reasonable€probabilityÏthat,€had€the€evidence€been€disclosed€to€the€defense,€the€result€ofÏthe€proceeding€would€have€been€different.€€A€'reasonableÏprobability'€is€a€probability€sufficient€to€undermine€confidence€inÏthe€outcome.ÌÌÓÓ473€U.S.€at€681„82,€105€S.€Ct.€at€3383;€òòaccordóó€òòWorkman€v.€Stateóó,€868€S.W.2dÏat€710.€€Given€the€quantum€of€evidence€presented€by€the€prosecution€at€trialÍthrough€numerous€witnesses€and€exhibits,€and€the€corroborative€nature€of€theÏprosecution's€evidence,€it€is€implausible€that€the€disclosure€of€the€€evidence€toÏthe€appellant€Frost€would€have€had€any€effect€whatsoever€on€the€outcome€ofÏthe€trial.€€This€issue€is€without€merit.ÌÌà@ àò òXIIó óÌà àThe€appellant€Frost€next€asserts€that€the€trial€court€erroneously€refused€toÏgrant€him€a€mistrial€when€one€of€the€witnesses€for€the€State€testified€about€aÏrecent€bankruptcy€petition€filed€by€him.€€The€testimony€in€question€was€asÏfollows:€ÌÓÓà0 àWITNESS:€€Well,€after€the€meeting€that€day€with€my€boss€and€I,Ïsomething€just€bothered€me,€and€it€just€didn't€sit€right.€€I€don't€know€but€itÏwas€just€something€that€bothered€me.€€And€for€some€crazy€reason€I€wentÏto€the€Customs€House.ÌÌà0 àPROSECUTOR:€€What€is€the€Customs€House?ÌÌà0 àWITNESS:€€Over€„„€I€don't€know€if€anything€else€is€in€that€building,€but€IÏdid€know€that€bankruptcies€were€in€that€building.€€And€I€went€over€andÏhad€them€pull€C.€Donald€Frost€„„ÌÌÓÓAt€this€point€counsel€for€the€appellant€Frost€interrupted€and€a€bench€conferenceÏoutside€of€the€presence€of€the€jury€ensued.€€This€reference€to€a€bankruptcy€inÏconnection€with€the€appellant€Frost€was€made€in€violation€of€a€prior€ruling€byÏthe€trial€court€which€prohibited€such€references.ÌÌà àDuring€the€jury„out€conference,€counsel€for€the€appellant€Frost€arguedÏthat€the€testimony€was€so€highly€prejudicial€to€him€that€a€mistrial€should€beÏgranted.€€The€trial€court€ruled€adversely€on€the€motion€but€offered€to€instruct€theÏjury€to€disregard€the€remark€and€to€use€it€for€no€purpose€whatsoever€in€the€trial.€ÏThe€appellant€Frost€consented€to€the€offer€and€the€limiting€instruction€was€givenÍto€the€jury.€€The€jury€is€presumed€to€have€followed€the€judge's€instruction.€òòStateÏv.€Johnsonóó,€762€S.W.2d€110,€116€(Tenn.€1988).ÌÌà àOn€appeal,€the€State€argues€not€only€that€the€limiting€instruction€wasÏadequate€protection€of€the€rights€of€the€appellant€Frost,€but€that€evidence€wasÏactually€admissible€to€show€that€the€appellants€had€failed€to€state€material€factsÏto€purchasers€of€the€investment€contracts.€€This€Court€need€not€reach€that€issue,Ïhowever,€because€it€is€clear€that€in€light€of€the€plethora€of€other€evidence€ofÏprior€crimes€and€bad€acts€that€the€jury€was€properly€allowed€to€consider,Ïincluding€other€bankruptcies€filed€by€the€appellants,€that€this€incident€did€notÏjustify€the€granting€of€a€mistrial.ÌÌà@ àò òXIIIó óÌà àThe€appellant€Frost€contends€that€the€trial€court€erroneously€permittedÏone€of€the€victims€to€testify€concerning€threats€made€to€her€by€an€individualÏnamed€Bob€Stanley,€who€was€an€officer€of€the€corporation€and€a€co„conspiratorÏof€the€appellants.€€The€appellant€Frost€asserts€that€the€admission€of€suchÏtestimony€was€in€violation€of€Tenn.€R.€Evid.€404€in€that€it€was€not€relevant€to€theÏprosecution€of€him€and€its€prejudicial€effect€clearly€outweighed€the€probativeÏvalue€of€the€evidence.ÌÌà àThe€appellant€apparently€is€of€the€belief€that€the€victim€testified€as€to€Mr.ÏStanley's€threats€of€physical€violence€in€the€presence€of€jury.€€Review€of€theÏrecord,€however,€reveals€that€the€victim€did€not€testify€before€the€jury€as€to€anyÏthreats€levied€against€her€by€Mr.€Stanley.€€Instead,€the€entire€discussionÍconcerning€threats€of€violence€made€by€Mr.€Stanley€took€place€in€a€jury„outÏoffer€of€proof.€€It€is€true€that€the€victim€testified€before€the€jury€as€to€a€meetingÏthat€she€had€with€Mr.€Stanley€in€which€less€than€amicable€words€were€utteredÏby€Mr.€Stanley.€€However,€none€of€his€words€or€actions€at€that€meetingÏconstituted€any€sort€of€€threat.ÌÌà àThe€only€threat€against€the€victim€that€was€presented€in€the€presence€ofÏthe€jury€was€the€appellant€Brewer's€threat€to€name€the€victim€in€a€civil€lawsuit.€ÏEven€though€this€threat€was€made€in€the€presence€of€Mr.€Stanley,€the€appellantÏFrost€has€not€proffered€any€argument€that€this€action€was€attributable€to€Mr.ÏStanley.€€Moreover,€the€appellants€made€no€objection€to€this€testimony€at€trial.ÌÌà àSince€no€threats€made€by€Mr.€Stanley€were€discussed€in€the€presence€ofÏthe€jury€and€the€appellants€have€made€no€effort€to€attribute€the€threats€of€civilÏlitigation€made€by€the€appellant€Brewer€to€Mr.€Stanley,€it€is€patently€obvious€thatÏthe€victim's€testimony€did€not€cause€the€appellant€Frost€to€suffer€any€prejudiceÏwhatsoever.€€This€issue€is€without€merit.ÌÌà@ àò òXIVó óÌà àIn€the€final€issue€of€this€appeal,€the€appellant€Frost€argues€that€theÏcombination€of€errors€committed€in€the€trial€of€this€case€denied€him€a€fair€trial.€ÏWe€disagree.ÌÌà àIt€is€well€recognized€that€while€individual€errors€may€not€require€relief,€theÏcombination€of€multiple€errors€may€necessitate€the€reversal€of€a€conviction.€òòSeeóóÍòòState€v.€Zimmermanóó,€823€S.W.2d€220,€228€(Tenn.€Crim.€App.€1991).€€InÏattempting€to€avail€himself€of€this€principle,€however,€the€appellant€Frost€simplyÏreiterated€his€argument€concerning€the€admission€of€evidence€of€priorÏconvictions€and€civil€wrongdoings.€€We€have€already€discussed€the€issuesÏrelated€thereto€and€found€them€all€to€be€lacking€in€merit.€€We€decline€to€engageÏin€tautology€here.€€Moreover,€in€view€of€all€of€the€evidence,€any€and€all€errorsÏthat€the€trial€court€may€have€committed,€with€the€exception€of€the€errorÏdiscussed€in€section€VIII€which€has€already€been€addressed,€did€not€affect€theÏverdict€of€guilty.€Tenn.€R.€Crim.€P.€52(b);€Tenn.€R.€App.€P.€36(b).ÌÌà àThe€judgment€is€affirmed€as€modified€herein.ÌÌÌÓÓà àà àà àà àà à______________________________Ìà àà àà àà àà àJERRY€SCOTT,€PRESIDING€JUDGEÌÌÌCONCUR:ÌÌÌÌ____________________________ÌPAUL€G.€SUMMERS,€JUDGEÌÌÌÌ____________________________ÌJOSEPH€M.€TIPTON,€JUDGEÌ