In our last article, we discussed the expanding reach of New York’s securities fraud statute, the Martin Act, and its questionable application in the New York Attorney General’s Office’s prosecution of Hank Morris.1 Mr. Morris moved to dismiss the indictment against him arguing that the Attorney General improperly sought to convict him for what amounted to honest services fraud under the Martin Act, which does not support such a claim. On June 10, the Attorney General’s Office filed a 206-page response, paying little heed to Mr. Morris’ honest services argument.2 On June 24, the U.S. Supreme Court decided three cases involving honest services fraud, including Skilling v. United States, vacating convictions on the ground that the honest-services component of the federal mail fraud statute criminalizes only schemes that involve bribes or kickbacks.

The Attorney General’s Office clearly believes the facts are on its side, responding to Mr. Morris’ motion with a lengthy and detailed presentation of the evidence presented to the grand jury that handed up the indictment against Mr. Morris. It describes Mr. Morris’ actions as “garden-variety [securities] fraud—concealments, misrepresentations, and non-disclosures of material information that any reasonable investor would want to know”3—the very behavior it argues is targeted by the Martin Act. The Attorney General summarily rejects Mr. Morris’ characterization of the action as one sounding in honest services fraud. After Skilling, such a back-of-the-hand dismissal may not carry the day.

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