A central element in the securities fraud trial of Thomas Etheredge has been how much responsibility rested with the investors.
In lengthy instructions to jurors Monday, Sedgwick County District Judge Ben Burgess made it clear that "buyer beware" does not apply in securities transactions.
Burgess said the buyer is "under no obligation to make an independent investigation of the security being offered for sale or the seller."
Closing arguments for both sides in the trial of Etheredge, founder of the ill-fated Wild West World, didn't finish until late in the day Monday. The jury deliberated for less than 20 minutes before being sent home for the evening. It will resume deliberations this morning.
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Kansas Securities Commissioner Chris Biggs, who is helping prosecute the case, told the jury, "These people bought a ticket on the Titanic because they trusted the captain."
In his closing argument, defense attorney Steve Joseph said, "To a reasonable investor, trust is not (part of the investing decision). He wants to know about risk and reward."
Etheredge is charged with nine counts of securities fraud relating to money he took from private investors for his failed theme park.
The prosecution has maintained that Etheredge didn't give complete information or lied about his personal background — including religious conversions and details of a previous securities fraud conviction — and business dealings to investors.
"The test isn't would they have invested (if they had known more)," Biggs told the jury, "but they had a right to know.
"He was able to convince people to trust him using untruths and leaving out very important information."
It took Burgess nearly 30 minutes to read the instructions to the jurors for the complex case, which featured two weeks of testimony.
The judge said the state must prove in each count that any false statement or omission concerned material facts that had a bearing on a reasonable investor's decision.
In his closing arguments, Biggs repeatedly referred to Etheredge's chapter in "Real Men, Real Faith" as a "brochure." He said Etheredge bought 500 copies of the book and used it to promote himself and as a
"pre-emptive strike" by giving limited details about serving time in prison.
But Joseph told the jury that the book was written in 2003, long before the idea of Wild West World was conceived.
The nature and number of Etheredge's religious conversions and experiences have been a frequent issue in the trial, largely because seven of the nine investors listed in the criminal complaint met Etheredge through church.
Those experiences were also part of the closing arguments.
Joseph said that a reasonable investor is one who is driven by making a profit and weighs the risks and rewards.
"A reasonable investor is not one who comes to you and says, 'God told me to do this,' " Joseph said referring to the testimony of one investor.
As for Etheredge serving as a Baptist pastor before claiming a jail-house conversion in the 1980s, Joseph asked the jury, "Do you think Warren Buffett would care about that if you came to him with a deal?"
Biggs told the jury that Etheredge's use of the story about his conversion in the book was relevant to the investors' decision to give him money.
He said Etheredge used it to "build up a personal relationship" with the investors and as a "badge of honor."
"It's not open season on everyday men who are not sophisticated (investors) like banks," Biggs told the jury. "It's not open season on church members and churches."
Earlier in the day, Burgess denied the defense's motion for a mistrial based on the judge allowing the videotape of a church celebration into evidence.
Friday, the prosecution showed a video of Etheredge giving a talk at Central Christian Church on July 4, 2004. Some of his statements in that talk conflicted with testimony in the trial.