United States v. Dardi (330 F.2d 316, 1964)

MOORE, Circuit Judge.

Four defendaixts, Virgil D. Dardi, Robert B. Gravis, Charles Rosenthal and Charles Bex*man, appeal from judgments of conviction that followed a jury verdict in which they were found guilty of unlawfully participating in the distribution of unregistered shares of United Dye and Chemical Corporation stock. Appellant Dardi was President and a Director of United Dye, a company long traded on the New York Stock Exchange. Appellants Berman, Gravis and Rosenthal were broker-dealers who dealt in the sale of stock in the over-the-counter max'ket. The Indictment

The indictment, which named thirty-three defendants and seventeen eo-coxxspirators, contained thirty counts arranged in three general categories: Conspiracy (Count 1), market manipulation (Counts 2-5) and sale of unregistered securities (Counts 6-30). Because of severances and pleas of guilty, of the thirty-three defendants only the four appellants and one eox'porate defendant participated in the trial to its completion.

Count 1 charged a conspiracy, 18 U. S.C. § 371, by Dardi, Berman, Gravis, Rosenthal and others illegally to sell unregistered United Dye stock to the public in violation of specified sections of the Securities Act of 1933 (15 U.S.C. §§ 77e (a), 77e(e), 77q(a), 77x), the Securities Exchange Act of 1934 (15 U.S.C. §§ 78i (a), 78j(b) and 78ff(a)), Rules and Regulations promulgated under both acts by the Securities and Exchange Commission and the Mail Fraud Statute (18 U.S.C. § 1341), and to defraud the United States by impeding the functions of the Securities and Exchange Commission (SEC). The methods used to obtain control of United Dye, the use made of other companies such as Franklin County Coal Corporation and Handridge Oil Corporation, the illegal sale of unregistered stock and the illegal market manipulations were set forth in twelve detailed paragraphs and subparagraphs. The thirty-two overt acts alleged in the indictment included specific meetings and letters. Counts 2, 4 and 5 charged Dardi, Garfield, Pasternak and others with illegally pegging and stabilizing the price of United Dye stock on the New York Stock Exchange. In counts 6 through 30 the broker-dealers, Rosenthal, Berman, Gravis and others, were charged with the use of the mails in connection with specific sales of United Dye stock.

Each appellant was convicted on the first count. Dardi was convicted on each of three market manipulation counts under 15 U.S.C. §§ 78i(a) (2), (a) (6) and 78ff(a) and 18 U.S.C. § 2. Berman, Gravis and Rosenthal were convicted on counts charging the illegal sale of unregistered United Dye stock in violation of 15 U.S.C. § 77e(a) (1), 77x and 18 U.S.C.A. § 2.

I.

Outline op the Evidence As an overture to an analysis of the many legal and factual grounds urged for reversal, it is necessary to describe in brief outline the factual background against which the case must be viewed. The Government’s case was constructed principally on the testimony of Alexander L. Guterma, the Chairman of the Board of United Dye and the central figure in the complex chain of transactions which he described to the jury. The Government alleged, and the jury must have found, the existence of a single multi-stage conspiracy which had as its central purpose distribution to the public of unregistered United Dye stock. In the preliminary stages of the scheme, the conspirators gained control of United Dye and created a corporation with which it was later merged, Handridge Oil Company. As a result of the HandridgeUnited Dye merger, the conspirators obtained 575,000 “control” shares of United Dye stock. Shortly thereafter, through manipulation of the market on the New York Stock Exchange and misleading and fraudulent statements to customers the shares were sold in the over-the-counter market without the registration required by the federal securities laws. A résumé of Guterma’s testimony on direct examination supplies most of the details on which these ultimate facts were grounded.

Preparations for the Merger of United Dye and Handridge Oil

In June of 1955, Guterma joined defendants Samuel Garfield and Irving Pasternak in their efforts to acquire the Franklin County Coal Corporation. Guterma testified that his partnership with Garfield and Pasternak was for the purpose of merging Franklin, then owned by John and Clint Murchison, Jr., with a company listed on either the New York or American Stock Exchange and then selling the stock of the listed company as thus acquired. Franklin’s two major assets, coal lands in Illinois, long inactive, and an oil pipeline in Wyoming, had been unable to muster a profitable return for several years. To effect the sale, Garfield and Pasternak gave their promissory note for $510,000 as the full purchase price, leaving the stock with the Murchisons as security. The only cash to change hands at this point was a loan of $800,000 from Garfield, Pasternak and Guterma to Franklin to redeem a like amount in mortgage debt to the Murchisons.

Since the Franklin stock was pledged with the Murchisons, and would be unavailable for a merger with a more substantial corporation, Guterma, Garfield and Pasternak found it necessary to improvise on their original plan. To this end Swann, their attorney, formed Hand-ridge Oil Corporation to which Garfield and Pasternak conveyed their interest in Franklin. In exchange, the 500,000 shares of Handridge were transferred to Swann, “in trust” for the three partners. Guterma testified, however, that subsequently much of the Handridge stock was held by nominees, to disguise Guterma’s, Garfield’s and Pasternak’s status as “control persons” under the 1933 Securities Act.

Meanwhile, Guterma had become acquainted with Dardi, ali’eady an officer and director of United Dye, and in the latter part of June, 1955, had agreed to purchase a block of 38,500 shares of United Dye stock through Dardi at ten dollars per share. There wei*e at this time about 168,000 shares of United Dye outstanding. Soon thereafter, Guterma distributed about two-thirds of the 38,-500 shares as follows: Pasternak, for himself and Garfield, bought 12,000 shares; 1,000 shares each went to co-conspirators Robert Eveleigh, a Guterma aide, and Robert Leonhardt, owner of McGrath Securities Corporation, a defendant brokerage house which was later to sell United Dye shares; and Dardi retained an option, later exercised, to buy 6,500 shares to complement the 17,700 shares he already held. By early September, 1955, Guterma had been elected Chairman of the Board, Dardi President, Eveleigh Treasurer, and Alexander Timm, one of Dardi’s associates, Assistant Secretary.

While Guterma was establishing himself at United Dye, he discussed with Dardi the prospects of a merger between United Dye and Franklin County Coal. A committee of United Dye Directors, including Dardi, was appointed to look into the proposal. Originally, Guterma represented Franklin in the negotiations with the committee but when he became a director, he negotiated on behalf of United Dye with Pasternak and Swann. The proposed merger was also discussed with the Committee on Stock Lists of the New York Stock Exchange, which eventually granted United Dye’s application to list the additional shares to be issued in the merger. In early December 1955, a merger agreement was executed under which United Dye was to issue 575,000 shares of its stock (then selling at approximately $30 per share) in exchange for the 575,000 shares of Handridge. Handridge was required to have at the closing, in addition to unencumbered Franklin shares, $750,000 in cash. Guterma testified that this $750,000 actually came from the sale of 75,000 Hand-ridge shares to, among others, United Dye directors, including Dardi, who concealed their ownership through an escrow agent.

To Guterma the then inflated price of United Dye stock was not conducive to execution of the merger, and he discussed the situation with Dardi and Hyman Lehrich, also an officer and director of United Dye, as well as with Garfield and Pasternak in October 1955. To meet the problem without running afoul of the securities laws governing the sale of control stock, Guterma and Pasternak entered into a series of “loan” agreements with various “borrowers,” in fact nominees, who immediately sold the rowed” stock reaping substantial profits in the process. The Government also adduced evidence that coincident with the sales of Guterma and Pasternak, Dardi through nominees disposed of the 6,500 shares he had purchased from Guterma under the June 1955 agreement. The cumulative eifect of the sale of substantially the whole 38,500 share block achieved the desired result of driving the price of United Dye from a high of $38 per share in November 1955 to approximately $16 on May 1, 1956 when the merger was to close. “bor-

Effectuation of the Merger of United Dye and Handridge.

The merger agreement between United Dye and Handridge stipulated that Hand-ridge was to own, at the date of the merger, the Franklin stock, then pledged with the Murchisons as security for Garfield and Pasternak’s $510,000 note, free and clear. Garfield and Pasternak, according to Guterma, did not have the funds to pay ofl: the note. Therefore, Guterma, Dardi, and Lehrich, in April 1956 caused the merger agreement to be modified to delete the free and clear requirement and to provide that United Dye would assume the note and that Garfield and Pasternak would pay United Dye $510,000 plus the $9,000 interest that had by then accrued.

Bon Ami

About this time Dardi learned that 63,-000 shares of the Bon Ami Company, which had over $3,000,000 in liquid assets, were available for purchase. By May 1, 1956 Dardi had executed an agreement with certain Bon Ami stockholders which provided for United Dye’s payment of $1,350,000 (to be borrowed from Guterma’s F. L. Jacobs Corporation) and the delivery of its $350,000 promissory note in exchange for 63,000 Bon Ami shares.

Guterma testified that control of Bon Ami was acquired to enable Garfield and Pasternak to satisfy the $519,000 obligation owed by them to United Dye. Moreover, his testimony, as well as other evidence on this phase of the case, could well support the conclusion that the Bon Ami treasury after the merger was used to satisfy the obligations incurred by United Dye in the very process of acquiring its 63,000 Bon Ami shares. To substantiate Guterma’s testimony, the Government introduced evidence of various “loan” transactions involving Garfield and Pasternak and, as Directors of Bon Ami, Guterma and Dardi. Immediately after the merger, the Bon Ami Executive Committee formed a subsidiary, B. A. Royalties, Inc., which was used as a conduit for transferring $860,000 of Bon Ami funds to Garfield and Pasternak. Out of the $860,000 Garfield and Pasternak, by check back dated to May 1, 1956, paid $519,000 to United Dye in payment of their note to the Murchisons; and, at the same time, they transferred $140,000 to United Dye, purportedly as a loan. Subsequently, so that Bon Ami would be repaid, Bon Ami transferred to Diversified Oil & Mining Corporation (D. O. M.), recently organized and controlled by Guterma, Garfield and Pasternak, $1,250,000 in exchange for a similar amount in D. O. M. debentures secured by D. O. M.’s properties. The same day, D. O. M. transferred $915,000 to Garfield and Pasternak, purportedly in partial payment for oil properties, although those properties had been previously pledged to Bon Ami, and $250,000 to United Dye as a loan. From the $915,-000 received from D. O. M., Garfield and Pasternak repaid the original $860,000 loan from Bon Ami. According to the Government, the final step in this series of transactions was the payment by United Dye of the obligations it had incurred in its purchase of Bon Ami, $1,700,000.

The Garfield and Pasternak Guarantee Under the United Dye-Handridge merger agreement, Garfield and Pasternak had guaranteed that the Franklin pipeline would, for each of the years 1956 and 1957 receive a minimum profit before amortization and depreciation of $1,200,000. As security, Garfield and Pasternak pledged 85,000 United Dye shares they had received in the merger to United Dye. Less than two months after the merger, Guterma recommended to the United Dye Board that this guarantee be waived in return for a cash payment of $800,000. As it happened, according to Guterma, Garfield and Pasternak transferred to United Dye $450,000 in cash (obtained partially from United Dye and partially from D. O. M.) and 115,000 shares of D. O. M. stock, arbitrarily valued at $250,000 although actually worth only $184,000. In return, they obtained the 85,000 shares, then worth $1,200,000, which could be sold in the forthcoming distribution.

Sales to the Public of United Dye Shares Issued in the Merger

The third objective of the GutermaGarfield-Pasternak partnership was the sale to the public of 500,000 shares of United Dye, amounting to more than 50 per cent of the stock outstanding, acquired in the May 1956 merger. To avoid the practical and legal difficulties attendant upon the sale of such a large block on the New York Stock Exchange, the three partners had agreed to sell the shares in the over-the-counter market. It was at this point, during the summer of 1956, that the broker-dealers commenced their operations. While the United Dye stock was being stabilized artificially on the Stock Exchange, the broker-dealers (enlisted by Guterma), primarily by way of hard-selling long distance telephone calls and misleading tout sheets (so-called “boiler room” tactics), sold the stock to the public, knowing that no registration statement had been filed. The firms involved, including I. F. Still-man, Inc. (appellant Rosenthal), R. B. Gravis, Inc. (appellant Gravis) and G. F. Rothschild & Company (appellant Berman) were to be paid a fifteen per cent commission plus one dollar in cash for each share sold.

Stabilizing the Market

The success of the telephone sales campaign depended in large measure on the price at which United Dye was being ti-aded on the Stock Exchange. To maintain the price, the shares sold initially over-the-counter had to be absorbed when offered on the Exchange. Consequently, Guterma made the necessary “pegging” arrangements with his aid, Hughes, defendant Brann, appellant Rosenthal, and defendant Sidney Barkley, Rosenthal’s associate in I. F. Stillman & Co.

Before the merger, Guterma had instructed Hughes to watch the market price and to purchase any large amounts of United Dye stock for which there was no demand. Hughes complied by opening several brokerage accounts and pux*chasing in the name of relatives, friends and nominees. Hughes’ efforts proved inadequate, however, when the boiler room sales began in earnest. To alleviate the problem, Dardi introduced Guterma to Brann who had expressed an interest in selling United Dye shares in Europe and in North Africa where he owned a bank. Brann could take advantage of 30 per cent margin, insure the anonymity of anyone conducting a market stabilization program, and tout the stock in his bank’s market letter. An arrangement was agreed upon wherein Brann was to buy United Dye stock on the New York Exchange, the margin coming fx-om Gutex*ma, and then to sell the stock abroad. Although the Brann arrangement eventually bogged down as a result of Brann’s alleged double-dealing the net result of the stabilizing efforts of Hughes, Brann, Rosenthal and Bax'kley proved successful.

The sales to the public and accompanying market manipulation, which lasted until early November 1956, completed the venture which Guterma, Garfield and Pasternak had undertaken a little over a year earlier, and in October they met at Clare, Michigan to discuss dividing the spoils amongst themselves. In April 1957 Guterma resigned from United Dye and began to sell the 83,000 shares he then owned. Dardi, according to Guterma, learned of these sales and, after reminding Guterma of Guterma’s agreement to give him first preference, purchased 40,000 shares from Guterma at the then market price of $7.

II.

Sufficiency of the Evidence

Because a large portion of the errors asserted by appellants are bottomed on disputed questions of fact and sufficiency of proof, it is appropriate to advert to certain long established principles of appellate review. A jury of twelve has heard all the testimony, explanations of the meaning of a vast number of exhibits, and the exhaustive summations of counsel, and has been instructed on the applicable legal rules. Their verdict, after due consideration, was that appellants were, on the facts and the law, guilty of substantive crimes and of conspiracy. It was within the exclusive domain of the jury to choose between competing inferences of fact, United States v. Grunewald, 233 F.2d 556, 563 (2d Cir. 1956), rev’d on other grounds, 353 U.S. 391, 77 S.Ct. 963, 1 L.Ed.2d 931 (1957). On appeal the evidence must be considered in a light most favorable to the Government. United States v. Tutino, 269 F.2d 488, 490 (2d Cir. 1959). Moreover, microscopic dissection of bits and pieces of evidence when laid out in a cold record overlooks the truism that “logically the sum is often greater than the aggregate of the parts, and the cumulation of instances * * * may have a probative force immensely greater than any one of them alone.” United States v. White, 124 F.2d 181, 185 (2d Cir. 1941).

Substantive Counts (the Broker-Dealers)

The broker-appellants’ convictions stem from their unlawful sales of unregistered stock. They do not dispute that they sold the stock or that it was not registered; rather, they claim that they were ignorant that the stock required registration at all. Section 5(a) of the Securities Act of 1933, 15 U.S.C. § 77e(a) sets up a general prohibition on the sale of unregistered securities with certain exemptions. No exemption is provided for an “underwriter” defined by the statute as any person who offers or sells a security for an “issuer.” An “issuer,” in turn, is defined in terms of “control.” Since the evidence clearly establishes that Guterma, Garfield and Pasternak were in “control,” and since the broker-appellants sold for one or more such “issuers,” each was an “underwriter” under the Act. See United States v. Crosby, 294 F.2d 928, 939-40 (2d Cir. 1961), cert. denied sub nom. Mittelman v. United States, 368 U.S. 984, 82 S.Ct. 599, 7 L.Ed.2d 523 (1962). Through this circuitous route it is apparent that the crucial issue as to the broker-dealers’ guilt is whether they knew that they were selling for a “control” group. In United States v. Crosby, supra, this Court found that there was insufficient evidence that the broker-dealers “knew or should have known they were ‘underwriters’ in terms of the Securities Act.” The evidentiary problem here is whether the link missing in Crosby has been supplied.

Berman

Berman has energetically undertaken the task of explaining away all the undesirable inferences that can be drawn from the evidence adduced against him. A similarly meticulous analysis of various transactions and meetings was urged to the jury. We set out here a few of the facts from which the jury might have justifiably chosen to disregard Berman’s explanations of his conduct. Berman came to Guterma and asked how many shares of United Dye were available and what the compensation was. He was told that about 150,000 shares “could be sort of held for him on an option basis.” When Berman pressed for more, he was informed that any amount he could sell tvould be forthcoming and that “there Was in excess of 200,000 to 250,000 available.” When Berman asked of compensation, Guterma said that brokers were getting 15 per cent by check and $1 in cash per share. Guterma also told him that the stock should be sold for a specific amount — at the closing New York Stock Exchange price. There was also evidence tending to show that six “vendor” letters, addressed to Garfield, Pasternak, Swann and three others were all sent instead to Swann, with whom Berman dealt, and that these letters were a subterfuge. Perhaps even more damaging was Guterma’s testimony that, when Berman expressed concern about the drop in United Dye price, Guterma replied that all efforts were being made regarding market stabilization and that Berman should not be disturbed about it.

Berman argues that it was only logical to ask the chief executive of a corporation if large blocks of shares were available for sale; that in discussing market price with Guterma he hoped that as Chairman of the Board Guterma would influence the market through legitimate corporate actions; and that the only inference that can be drawn from the “vendor” letters is that copies were sent to Swann in his representative capacity. Whatever the various inferences it might have drawn, the jury heard Berman’s explanation of his conduct and discredited it. The evidence presented describing the circumstances of Berman’s participation in the distribution is sufficient to support the jury’s conclusion that he knew that his sales were for a control group.

Berman also asserts his good faith reliance on legal opinions that the stock was tradeable without registration, as did the broker-dealers in United States v. Crosby, supra. The Crosby case makes it clear, however, that reliance on the opinion of counsel is but one consideration which may be persuasive in the jury’s determination of the defendant’s state of mind. Among other factors which the jury could consider as going to Berman’s good faith reliance on legal advice was the fact that the letters expressing the opinion that the stock could be sold without registration specifically made the assumption that the sales were not being made for “control” persons. And, as pointed out, the jury could have inferred that when these opinions were rendered Berman knew that he was dealing with control persons.

Gravis

Gravis first expressed his interest in selling United Dye to Hughes, who arranged a meeting with Guterma. Guterma told Gravis that the amount of available shares was in excess of one-half million, and assured him that these shares would not be sold on the Exchange so as to undercut the price. Guterma further informed Gravis that he could acquire shares for distribution, and that “the brokers” were receiving 15 per cent commission by check and $1 in cash. There was also evidence that Gravis was one of the brokers who sent periodic “confirmations” of sales to Hughes at United Dye. Finally, these was evidence that Gravis made false statements to SEC Investigator Pitchardo from which the jury might have concluded that Gravis knew full well that his sales were unlawful and that Guterma was in a control position.

Rosenthal

Guterma’s testimony alone provides a sufficient basis on which the jury could have decided that Rosenthal knew he was selling for Guterma and his control group. Guterma told Rosenthal that he (Guterma) and his “associates,” Garfield, Pasternak, Swann and others, wanted to sell United Dye shares in the over-the-counter market. He further informed Rosenthal that the group controlled a total of approximately 550,000 shares and that “substantially all of these shares would be sold.” In addition, testimony of Barkley, Rosenthal’s former partner, was that he and Rosenthal had actively engaged in market “pegging” while the United Dye shares were being retailed, under Guterma’s supervision.

The Conspiracy Count

The broker-appellants make the complaint that the Government failed to prove the single conspiracy alleged in Count 1; that the proof showed that any conspiracy to sell securities to the public was independent of a separate and prior conspiracy involving the creation of the shares and their distribution to the co-conspirators and nominees. The prejudicial effect of the mass of evidence introduced as to the activities of Guterma and his “executive” group, it is argued, requires reversal on the substantive counts as well as the conspiracy count.

As was recently said in United States v. Crosby, supra, at 945 of 294 F.2d, “[w]hether a scheme is one conspiracy or several is primarily a jury question, since it is a question of fact as to the nature of the agreement.” In the case at bar the jury was so instructed.

There was abundant evidence to show the complicity of Guterma, Garfield and Pasternak, among others, in one plan consisting of a progression of carefully related transactions which had as its ultimate purpose the sale to the public of unregistered stock. Indeed, Guterma testified that this was precisely what his venture with Garfield and Pasternak was all about. But it is not fatal that the broker-appellants were not shown to have been aware of each part of the unlawful plan. See United States v. Benjamin, 328 F.2d 854 (2d Cir. 1964); United States v. Crosby, supra at 945 of 294 F.2d; United States v. Agueci, 310 F.2d 817 (2d Cir. 1962), cert. denied, Guippone v. United States, 372 U.S. 959, 83 S.Ct. 1013, 10 L.Ed.2d 11 (1963). It is only necessary to show that appellants knew of the conspiracy and that they asr sociated themselves with it. United States v. Bentvena, 319 F.2d 916, 928 (2d Cir. 1963), cert. denied [Ormento v. U. S., Di Pietro v. U. S., Fernandez v. U. S., Panico v. U. S., 375 U.S. 940, 84 S.Ct. 345, 11 L.Ed.2d 271; Galante v. U. S., 375 U.S. 940, 84 S.Ct. 346, 11 L.Ed.2d 271; Loicano v. U. S., 375 U.S. 940, 84 S.Ct. 353, 11 L.Ed.2d 272; Mancino v. U. S., 375 U.S. 940, 84 S.Ct. 354,. 11 L.Ed.2d 272; Sciremammano v. U. S., 375 U.S. 940, 84 S.Ct. 355, 11 L.Ed.2d 272; Mirra v. U. S., 375 U.S. 940, 84 S.Ct. 360, 11 L.Ed.2d 272]; United States v. Aviles, 274 F.2d 179 (2d Cir. 1959), cert. denied, sub nom. Genovese v. United States, 362 U.S. 974, 80 S.Ct; 1059, 4 L.Ed.2d 1010 (1960).

We must conclude that there was sufficient evidence from which the jury could find that the broker-appellants knew that Guterma represented a control group acting in concert for the purpose of selling to the public unregistered stock. Upon the facts here, the sufficiency of the proof on the conspiracy count is bolstered by the determination of the adequacy of proof on the substantive count. See United States v. Crosby, supra, at 940 of 294 F.2d.

III.

Conduct op the Trial

Dardi, apart from points dealing with claims of specific evidentiary errors, asserts that he was denied a fair trial (1) because of the trial court’s failure to grant proper and timely pre-trial production of documents and a bill of particuIars; (2) because of the extended duration of the trial and the court’s toleration of “colloquy”; (3) because of the charge; and (4) because of unfair and discriminatory treatment by the trial court. Pre-Trial

Probably no experienced trial counsel has ever commenced a trial feeling that every necessary item had been fully and adequately prepared and that nothing remained to be done during the trial. If so, it is an experience enjoyed by very few. The usual pattern, particularly in the complicated and protracted case, is to spend most of the time after daily recess preparing for the morrow. And certain it is that trial counsel, if worthy of the title, never are satisfied that all possibilities of law and fact have been explored and that all the arguments essential to victory have been made. Limitations of time, space and the finite mind apply even to lawyers and it is against the background of this unfortunate but actual limitation that this trial must be viewed.

The indictment was filed on July 14, 1961. It was by no means in skeleton form. The conspiracy was alleged in detail and thirty-two overt acts were set forth. The particular statutes claimed to have been violated were set forth. The nature of the conspiracy, namely, the sale of unregistered stock, the rigging of the market and the fraudulent sale to the public were alleged not in generalities but with reference to the specific means used for these purposes. The substantive counts dealing with market manipulation and sale were equally definite. Surely these appellants were adequately informed of the charges against them.

They complain, however, that they were not allowed sufficient pre-trial discovery and inspection and a detailed bill of particulars. In September 1961 defense counsel filed their motions for discovery and particulars. In December a single judge was appointéd before whom all matters were to be heard. Early in February 1962 the court denied the motions. This denial, however, did not cut off the defense from information. On February 8, 1962 the Government served an eight-page bill of particulars and offered to make available some sixty-eight categories of documents. Pre-trial conferences were held during February with the not unusual result of the Government claiming that it was being over-liberal in its disclosures and the defense contending either that it was not enough or too much to be encompassed before the commencement of the trial. It was at this point that the trial court, faced with the necessity of commencing the trial at some time, made the suggestion that defense counsel could prepare as the case went along. No inference can be drawn from this remark that defense counsel approached the day of trial completely unprepared and that the trial court callously told them to prepare as they went along. They had been aware of the charges against their clients for some eight months. Their motions, the pre-trial conferences, the “minutiae” in the Government’s bill of particulars, of which they now complain, all refute their present claim.

Even after the commencement of the trial (February 27, 1962) defense counsel had many opportunities for further preparation usually not afforded in the average trial. The Government’s case was presented in substantial part through Guterma whose testimony commenced on March 9, 1962. A week’s adjournment, caused by a defendant’s illness, occurred between March 13th and 20th. The first occasion for cross-examination by any of appellant’s counsel did not arise until April 16th. Investigation into each phase of his testimony surely could have been made in this interval.

Lastly and most determinative is the fact that Dardi makes no showing on this appeal that the facts would have been other or different had he had an additional year or six months in which to prepare. Nor does he point even now to any facts which could have been developed which would have so radically changed the fact picture that, in effect, a new trial should be granted.

The Duration of the Trial

All the evils attendant to a long trial (February 27, 1962 to January 31, 1963) are stressed by appellants: the possibility of the jury being unable to remember the testimony given in the earlier stages of the trial, the jury’s impatience in being deprived of the opportunity to attend to their own affairs, their expressed resentment at short court sessions, abandonment of any summer vacation plans and their restlessness over the long periods involved in court-counsel colloquy.

There can be no scale by which to measure the proper length of a trial. See, e. g., People v. Clemente, 8 N.Y.2d 1, 200 N.Y.S.2d 625, 167 N.E.2d 327, cert. denied, 364 U.S. 923, 81 S.Ct. 289, 5 L.Ed.2d 262 (1960). For the reasons specified and many others, long trials should be avoided. However, a multidefendant stock fraud case, as involved as this one, usually necessitates delving into many financial transactions. Those who participate in such transactions do not supply the government with a simple and clear picture. The picture, even as on a jig-saw puzzle, only comes into vision by the assembling of hundreds of curiously shaped parts, each piece seemingly having no identity until it is fitted into and made a part of the whole. Every defendant can claim and with much plausibility that his own role may have become besmirched by having been tried with others more guilty than he — and naturally every defendant feels that he is the least guilty, if guilty at all.

Two legal principles, however, must be honored. Those entrusted to make the laws have placed the crime of conspiracy on the books and it has not been repealed despite the fact that throughout the ages it has been largely responsible for multi-defendant trials and the admission of evidence otherwise inadmissible. Nor does any statute exist nor are there court decisions which declare a trial of more than one defendant at a time to be reversible error. \

In any financial scheme of magnitude involving many persons and many companies it is but normal expectancy that there be many participants. If the Government honestly believes (and there is no proof here to the contrary) that many defendants have played a part in the conspiracy they may be — and probably should be — joined as defendants. Again a long-established legal principal contributes to this joinder, namely, that a defendant need not be a member of the conspiracy from its inception to its termination. Defendant co-conspirators in many instances need not even know their fellow conspirators or the particular part they are playing. If the indictment of the many original defendants contributed to the length of the trial, this fact does not constitute reversible error.

Colloquy

Appellants argue that they were deprived of a fair trial because of the extensive colloquy engaged in between court and counsel. They point to certain statistics, inserted in the record by the court itself, that after over eight months of trial the 19,544-page transcript contained 9,814 pages of recorded testimony, 892 pages related to ancillary matters and 8,838 pages devoted to colloquy— practically 50 per cent testimony, 50 per cent colloquy. The trial was eventually to consume over eleven months and the transcript to extend over 26,000 pages.

By definition, colloquy is mutual discourse. In any litigation, but particularly where many defendants and many counsel are assembled, colloquy is indeed mutual and can, unless controlled, become overly extensive. The Dardi brief contains a twenty-four page analysis of the subject matter of the more extended colloquies. Each topic was related to some point, substantive or procedural, which one or more counsel believed to be of importance to his cause. The trial court was undoubtedly moíivated by a desire to obtain the correct answer and to give counsel the benefit ;of expressing their views. However, is the trial transcript the place to have recorded the extemporaneous legal philosophies of counsel, philosophies frequently tinged by the exigencies of the moment and the character of the testimony sought to be admitted or excluded? Would it not be better to insist that trial counsel insofar as possible be prepared to justify their positions in written memoranda submitted to the court? The myriad of legal points which could be conjured up by resourceful counsel, if debated on the record in a long and complicated case such as this, would result in a legal treatise not unlike a hypothetical Corpus Juris Tertium. Using the statistics submitted to us, since half of the record in eight months was devoted to matters other than testimony, the jury was subjected to four months of enforced attendance at a debating contest. This is not to say that on occasion a brief statement of the grounds for objection or the reasons for the admission or exclusion of evidence may not be helpful to court and opponent but the dictation by counsel on the record of treatises tantamount to Law Review articles should be avoided.

Except for unduly protracting .the trial, and we have already determined that length per se does not create reversible error, the colloquy itself does not disclose material of a prejudicial .nature. Furthermore, the blame, if blame there be, must be shared by the -court and all counsel. But this is not to say that a tighter rein by the Judge would not have resulted in a materially 'shorter .trial. We have already said that the court has wide discretion in adopting methods which will expedite a trial and that there are occasions when it is wise for this discretion to be exercised. See United States' v. Agueci, supra, at 841