Gene England and the Securities Act

The name of Eugene England is known among two different (if sometimes overlapping) population groups: Mormon studies scholars, and securities lawyers. For the former, the name brings to mind images of a scholar, writer, and teacher. For the latter, the name brings to mind an example of what not to do with section 2(a)(11) of the Securities Act.

For the unitiated, 2(a)(11) defines who is considered an underwriter for purposes of the securities laws. This is an important inquiry. Underwriters must meet a number of requirements (registration, prospectus, and so on) if they are involved in the sale of any non-exempt security. Non-underwriters (unless they are issuers or dealers) need not trifle with such nonsense.

2(a)(11) reads, in part and with emphasis added:

The term “underwriter” means any person who has purchased from an issuer with a view to, or offers or sells for an issuer in connection with, the distribution of any security, or participates or has a direct or indirect participation in any such undertaking, or participates or has a participation in the direct or indirect underwriting of any such undertaking . . . .

Thus, one important inquiry in determining whether an entity is an underwriter for securities law purposes is whether that entity purchases securities for investment purposes or with a view to distribution. If the former, then the entity is not an underwriter. If the latter — if the entity purchases with a view to distribute — then the Securities Act requirements kick in. One of the leading cases in this area is G. Eugene England Foundation v. First Federal Corp., 663 F.2d 988 (10th Cir. 1973).

In 1969, the G. Eugene England Foundation* took on an investment in oil. It acquired 125,000 shares in Kashmir Oil, from one Norman Hays, through his vehicle First Federal Corp.; in exchange for this consideration, the foundation ceded land to Hays. Hays had himself had acquired the shares sixteen months prior from the Kashmir Oil company itself.

Within a year the investment soured, and the Foundation sought rescission of the deal. Among other things, the Foundation argued that First Federal had sold them an unregistered security. First Federal counterargued that it had no obligation to register the securities, because it was not an issuer, underwriter, or dealer.

The Tenth Circuit ruled for the Foundation. The court held that, because First Federal (and Hays) had only owned the securities for sixteen months, they had acquired them “with a view to distribute” rather than for investment purposes. And since First Federal was acting as a securities distributor, rather than an investor, it was liable as an underwriter for its violations of the securities laws.

Now, doesn’t that just make you want to talk about God’s perfection in different spheres?


*The case discusses testimony by England himself, but it’s not at all clear from the text whether this case refers to Eugene England Sr. or Jr. The younger England — who is the well-known scholar — would have been 36 at the time of the litigation. Because of the court’s discussion of the business acumen of the businessman England, I suspect that the England mentioned in the case is actually Eugene England Sr.

4 comments for “Gene England and the Securities Act

  1. September 22, 2005 at 8:29 am

    “Now, doesn’t that just make you want to talk about God’s perfection in different spheres?”

    Actually, it kind of makes me want to talk about the arbitrariness of federal securities and administrative law. God? Nah.

  2. September 22, 2005 at 8:38 am

    FWIW, G. Eugene England Sr. was mission president in the North Central States mission from 1954 to 1957. I agree that the court case likely referred to Sr., not Jr.

    BTW, Sr.’s death (in the late 1990s?) was the source of a rumor that Jr. had died at that time, one that Jr. had to disavow. Unfortunately, Gene England Jr.’s untimely death in 2001 too quickly followed his father’s death.

  3. Steve Evans
    September 22, 2005 at 9:01 am

    Michael, there’s nothing arbitrary about the case — Kaimi IMHO is focusing on the wrong part of the case — it’s most important because of Hays’ involvement, not First Federal. Hays had a bit of a scheme going on whereby he would buy chunks of stock and sell them to investors, but would not acquire the stock “with a view” to sell it, necessarily; he didn’t have a specific investor in mind when he bought it. It’s a good decision.

  4. Eve
    September 27, 2005 at 5:31 pm

    The Church of Jesus Christ of Latter-day Saints
    The Council of the Twelve
    47 East South Temple Street, Salt Lake City, Utah 84150

    February 19, 1981

    Mr. Eugene England
    c/o Honors Program
    4012 Harold B. Lee Library
    Provo, Utah 84602

    Dear Brother England:

    This may well be the most important letter you have or will receive. It is written in reply to an undated letter from you which came in an envelope postmarked, September 4, 1980. Your letter enclosed a 19-page document which you had prepared under the title, “The Perfection and Progression of God: Two Spheres of Existence and Two Modes of Discourse.”

    In your letter and the article enclosed with it, you set forth the thesis that although God knows all things as pertaining to our sphere of existence, there are nonetheless other spheres beyond ours in which Deity continues to advance and progress in knowledge and truth. In espousing and explaining this philosophy you suppose you are harmonizing quotations from various of the early Brethren. Some of these statements emphatically say that God knows all things and has all power and others of them say that he is advancing in knowledge and understanding and is gaining new truths.

    When your letter arrived I was aware of the subject material contained in it and in the enclosed article. Because I do not engage in controversy or discussion of divergent views, either orally or in writing, I simply dropped your letter in a drawer and did not bother to read it. Some four and a half months later, in January of this year, I did read your presentation for the first time. I was not at all pleased, but still thought I would have nothing to say to you on the subject.

    Over the months various hearsay reports have come to me indicating that you are presenting and championing the views you sent to me. I have now reached the conclusion that it would be wise for me to depart from my usual custom and send you an answer to your letter. I do so out of respect for your parents, G. Eugene and Dora, and for your own personal well-being and for your guidance where your teachings and discussions with others are concerned.

    I shall write in kindness and in plainness and perhaps with sharpness. I want you to know that I am extending to you the hand of fellowship though I hold over you at the same time, the scepter of judgement. My office door is open to you and if you feel the need for discussion with me, my secretary will be pleased to set up a mutually convenient time or times for such.

    On Sunday, June 1, 1980, I spoke at one of the multi-stake firesides in the Marriott Center on the subject, “The Seven Deadly Heresies.” In that talk I said:

    There are those who say that God is progressing in knowledge and is learning new truths.

    This is false — utterly, totally, and completely. There is not one sliver of truth in it. It grows out of a wholly twisted and incorrect view of the King Follet Sermon and of what is meant by eternal progression.

    God progresses in the sense that his kingdoms increase and his dominions multiply — not in the sense that he learns new truths and discovers new laws. God is not a student. He is not a laboratory technician. He is not postulating new theories on the basis of past experiences. He has indeed graduated to that state of exaltation that consists of knowing all things and having all power.

    The life that God lives is named eternal life. His name, one of them, is “Eternal,” using that word as a noun and not as an adjective, and he uses that name to identify the type of life that he lives. God’s life is eternal life, and eternal life is God’s life. They are one and the same. Eternal life is the goal we shall obtain if we believe and obey and walk uprightly before him. And eternal life consists of two things. It consists of life in the family unit, and, also, of inheriting, receiving, and possessing the fulness of the glory of the Father. Anyone who has each of these things is an inheritor and possessor of the greatest of all gifts of God, which is eternal life.

    Eternal progression consists of living the kind of life God lives and of increasing in kingdoms and dominions everlastingly. Why anyone should suppose that an infinite and eternal being, who has presided in our universe for almost 2,555,000,000 years, who made the sidereal heavens, whose creations are more numerous than the particles of the earth, and who is aware of the fall of every sparrow — why anyone would suppose that such a being has more to learn and new truths to discover in the laboratories of eternity is totally beyond my comprehension.

    Will he one day learn something that will destroy the plan of salvation and turn man and the universe into an uncreated nothingness? Will he discover a better plan of salvation than the one he has already given to men in worlds without number?

    The saving truth, as revealed to and taught, formally and officially, by the Prophet Joseph Smith in the Lectures on Faith is that God is omnipotent, omniscient, and omnipresent. He knows all things, he has all power, and he is everywhere present by the power of his Spirit. And unless we know and believe this doctrine we cannot gain faith unto life and salvation.

    Joseph Smith also taught in the Lectures on Faith “that three things are necessary in order that any rational and intelligent being may exercise faith in God unto life and salvation. These he named as:

    The idea that he actually exists;
    A correct idea of his character, perfections, and attributes;
    An actual knowledge that the course of life which he is pursuing is according to the divine will.
    The attributes of God are given as knowledge, faith or power, justice, judgement, mercy, and truth. The perfections of God are named as “the perfections which belong to all of the attributes of his nature,” which is to say that God possesses and has all knowledge, all faith or power, all justice, all judgement, all mercy, and all truth. He is indeed the very embodiment, personification, and source of all these attributes. Does anyone suppose that God can be more honest than he already is? Neither need any suppose there are truths he does not know or knowledge he does not possess.

    Thus Joseph Smith taught, and these are his words: “Without the knowledge of all things, God would not be able to save any portion of his creatures, for it is by reason of the knowledge which he has of all things, from the beginning to the end, that enables him to give that understanding to his creatures by which they are made partakers of eternal life; and if it were not for the idea existing in the minds of men that God had all knowledge, it would be impossible for them to exercise faith in him.”

    If God is just dabbling with a few truths he has already chanced to learn, or experimenting with a few facts he has already discovered, we have no idea as to the real end and purpose of creation.

    The foregoing quotation is from the published version of the talk. As it was actually given it included the following paragraph: “Will he one day learn something that will destroy the plan of salvation and turn man and the universe into an uncreated nothingness? Will he discover a better plan of salvation than the one he has already given to men in worlds without number? I have been sorely tempted to say at this point that any who so suppose have the intellect of an ant and the understanding of a clod of miry clay in a primordial swamp — but of course I would never say a thing like that.” I deliberately deleted the last quoted sentence because it does not come out in print the way it was expressed by voice. It was said in such a tone as to draw laughter from the congregation and is of course, a normal use of hyperbole.

    In that same devotional speech I said: “There are those who believe or say they believe that Adam is our father and our God, that he is the father of our spirits and our bodies, and that his is the one we worship.” I, of course, indicated the utter absurdity of this doctrine and said it was totally false.

    Since then I have received violent reactions from Ogden Kraut and other cultists in which they have expounded upon the views of Brigham Young and others of the early Brethren relative to Adam. They have plain and clear quotations saying all of the things about Adam which I say are false. The quotations are in our literature and form the basis of a worship system followed by many of the cultists who have been excommunicated from the Church. I also received, of course, your material in which you quote from Brigham Young and others of the early Brethren saying that God is progressing in knowledge.

    I assume that you were aware of the foregoing quotations when you wrote me in September of 1980. In the October 1980 General Conference, without as yet having read your material, I said the following:

    True religion is found only when we worship the true and living God. False religion always results from the worship of false gods. Eternal life itself, which is the greatest of all the gifts of God, is available to those and those only who know God and Jesus Christ whom he hath sent.

    It is all the rage in this modern world to worship false gods of every sort and kind. There are those who bow before idols of wood and stone, and others who lisp their petitions to icons and images. There are those who worship cows and crocodiles, and others who acclaim Adam or Allah or Buddha as their Supreme Being.

    There are those who apply the names of Deity to some spirit essence that is immaterial, uncreated and unknowable and that fills the immensity of space and is everywhere and nowhere in particular present.

    And there are even those who champion the almost unbelievable theory that God is an Eternal student enrolled in the University of the Universe where he is busily engaged in learning new truths and amassing new and strange knowledge that he never knew before.

    How belittling it is — it borders on blasphemy — to demean the Lord God Omnipotent by saying he is an idol, or image, or an animal, or a spirit essence, or that he is ever learning but never able to come to a knowledge of all truth.

    It is the first principle of revealed religion to know the nature and kind of being that God is. As for us: “We know [and testify] that there is a God in heaven, who is infinite and eternal, from everlasting to everlasting the same unchangeable God, the framer of heaven and earth, and all things which are in them.” (D&C; 20:17)

    This great God, the Lord Almighty, is a personage of tabernacle. He “has a body of flesh and bones as tangible as man’s.” (D&C; 130:22) He is omnipotent, omniscient, and omnipresent. He has all power, knows all things, and, by the power of his Spirit, is in and through all things.

    On Tuesday, February 17, 1981, I was the speaker at the BYU Devotional. My subject was “The Three Pillars of Eternity,” under which heading I spoke of the creation, the fall and the atonement. With reference to the omnipotence and omniscience of God, I said in the talk:

    Who is Elohim? He is God the Eternal Father. He is a glorified and exalted personage. He has a body of flesh and bones as tangible as man’s. In the language of Adam, Man of Holiness is his name. He is omnipotent, omniscient, and omnipresent. He knows all things and has all power — not simply as pertaining to us or in some prescribed sphere or realm — but in the absolute, eternal, and unlimited sense. In the ultimate sense, he is the Creator. And anything you may have heard to the contrary, whether in the creeds of Christendom or the mouthings of intellectuals, who, in their own eyes, know more than the Lord, is false.

    Now may I say something for your guidance and enlightenment. If what I am about to say should be taken out of context and published in Dialogue or elsewhere, it would give an entirely erroneous impression and would not properly present the facts. As it happens, I am a great admirer of Brigham Young and a great believer in his doctrinal presentations. He was called of God.

    He was guided by the Holy Spirit in his teachings in general. He was a mighty prophet. He led Israel the way the Lord wanted his people led. He built on the foundation led by the Prophet Joseph. He completed his work and has gone on to eternal exaltation.

    Nonetheless, as Joseph Smith so pointedly taught, a prophet is not always a prophet, only when he is acting as such. Prophets are men and they make mistakes. Sometimes they err in doctrine. This is one of the reasons the Lord has given us the Standard Works. They become the standards and the rules that govern where doctrine and philosophy are concerned. If this were not so, we would believe one thing when one man was president of the Church and another thing in the days of his successors. Truth is eternal and does not vary. Sometimes even wise and good men fall short in the accurate presentation of what is truth. Sometimes a prophet gives personal views which are not endorsed and approved by the Lord.

    Yes, President Young did teach that Adam was the father of our spirits, and all the related things that the cultists ascribe to him. This, however, is not true. He expressed views that are out of harmony with the gospel. But, be it known, Brigham Young also taught accurately and correctly, the status and position of Adam in the eternal scheme of things. What I am saying is, that Brigham Young contradicted Brigham Young, and the issue becomes one of which Brigham Young we will believe. The answer is we will believe the expressions that accord with the teachings in the Standard Works.

    Yes, Brigham Young did say some things about God progressing in knowledge and understanding, but again, be it known, that Brigham Young taught emphatically and plainly, that God knows all things and has all power meaning in the infinite, eternal and ultimate and absolute sense of the word. Again, the issue is, which Brigham Young shall we believe and the answer is: We will take the one whose statements accord with what God has revealed in the Standard Works.

    I think you can give me credit for having a knowledge of the quotations from Brigham Young relative to Adam and of knowing what he taught under the subject that has become known as the Adam God Theory. President Joseph Fielding Smith said that Brigham Young will have to make his own explanations on the points there involved. I think you can also give me credit for knowing what Brigham Young said about God progressing. And again, that is something he will have to account for. As for me and my house, we will have the good sense to choose between the divergent teachings of the same man and come up with those that accord with what God has set forth in his eternal plan of salvation.

    This puts me in mind of Paul’s statement: “There must be also heresies among you, that they which are approved may be made manifest among you.” (1 Cor. 11:19) I do not know all of the providences of the Lord, but I do know that he permits false doctrine to be taught in and out of the Church and that such teaching is part of the sifting process of mortality. We will be judged by what we believe among other things. If we believe false doctrine, we will be condemned. If that belief is on basic and fundamental things, it will lead us astray and we will lose our souls. This is why Nephi said: “And all those who preach false doctrines, . . . wo, wo, wo be unto them, saith the Lord God Almighty, for they shall be thrust down to hell!” (2 Nephi 28:15) This clearly means that people who teach false doctrine in the fundamental and basic things will lose their souls. The nature and kind of being that God is, is one of those fundamentals. I repeat: Brigham Young erred in some of his statements on the nature and kind of being that God is and as to the position of Adam in the plan of salvation, but Brigham Young also taught the truth in these fields on other occasions. And I repeat, that in his instance, he was a great prophet and has gone on to eternal reward. What he did is not a pattern for any of us. If we choose to believe and teach the false portions of his doctrines, we are making an election that will damn us.

    It should be perfectly evident that under our system of church discipline, it would be anticipated that some others besides Brigham Young would pick up some of his statements and echo them. Those who did this, also on other occasions, taught accurately and properly what the true doctrines of the gospel are. I do not get concerned when a good and sound person who, on the overall, is teaching the truth, happens to err on a particular point and say something in conflict with what he has said himself on a previous occasion. We are all mortal. We are all fallible. We all make mistakes. No single individual all the time is in tune with the Holy Spirit, but I do get concerned when some person or group picks out false statements and makes them the basis of their presentation and theology and thus ends up having a false concept of the doctrine, which in reality, was not in the mind of the person whose quotations they are using.

    Wise gospel students do not build their philosophies of life on quotations of individuals, even though those quotations come from presidents of the Church. Wise people anchor their doctrine on the Standard Works. When Section 20 says that God is infinite and eternal, it means just that, and so on through all of the revelations. There is no need to attempt to harmonize conflicting views when some of the views are out of harmony with the Standard Works. This is what life is all about. The Lord is finding out what we will believe in spite of the allurements of the world or the philosophies of men or the seemingly rational and logical explanations that astute people make

    We do not solve our problems by getting a statement from the president of the Church or from someone else on a subject. We have been introduced to the gospel; we have the gift of the Holy Ghost; we have the Standard Works and it is our responsibility to get in tune and understand properly what the Lord has revealed and has had us canonize. The end result of this course of personally and individually pursuing light and truth is to reach that millennial state of which the scriptures say it will no longer be necessary for every man to say to his neighbor, “know the Lord,” for all shall know him from the greatest to the least. Joseph Smith says this will be by the spirit of revelation.

    If it is true, as I am advised, that you speak on this subject of the progression of God at firesides and elsewhere, you should cease to do so. If you give other people copies of the material you sent me, with the quotations it contains, you should cease to do so. It is not in your province to set in order the Church or to determine what its doctrines shall be. It is axiomatic among us to know that God has given apostles and prophets “for the edifying of the body of Christ,” and that their ministry is to see that “we henceforth be no more children, tossed to and fro, and carried about with every wind of doctrine, by the slight of men, and cunning craftiness, whereby they lie in wait to deceive.” (Eph. 4:16) This means, among other things, that it is my province to teach to the church what the doctrine is. It is your province to echo what I say or to remain silent. You do not have a divine commission to correct me or any of the Brethren. The Lord does not operate that way. If I lead the Church astray, that is my responsibility, but the fact still remains that I am the one appointed with all the rest involved to do so. The appointment is not given to the faculty at Brigham Young University or to any of the members of the Church. The Lord’s house is a house of order and those who hold the keys are appointed to proclaim the doctrines.

    Now you know that this does not mean that individuals should not do research and make discoveries and write articles. What it does mean is that what they write should be faith promoting and where doctrines are concerned, should be in harmony with that which comes from the head of the Church. And those at the head of the Church have the obligation to that which is in harmony with the Standard Works. If they err then be silent on the point and leave the events in the hands of the Lord. Some day all of us will stand before the judgement bar and be accountable for our teachings. And where there have been disagreements the Lord will judge between us. In the meantime if we want to save our own souls we need to strive with all the power we have to be in harmony with the revelations and not to be teaching or promulgating doctrines that suit our fancy.

    I advise you to take my counsel on the matters here involved. If I err, that is my problem; but in your case if you single out some of these things and make them the center of your philosophy, and end up being wrong, you will lose your soul. One of the side effects of preaching contrary to what the Brethren preach is to get a spirit of rebellion growing up in your heart. This sort of thing cankers the soul spiritually. It drives people out of the Church. It weakens their faith. All of us need all of the faith and strength and spiritual stability we can get to maintain our positions in the Church and to work out our salvation.

    Now, I think I have said enough in this letter so that if you are receptive and pliable, you will get the message. If you are not, rebellion will well up in your heart. I pray for your well-being. I repeat: the door to my office is open. Perhaps I should tell you what one of the very astute and alert General Authorities said to me when I chanced to mention to him the subject of your letter to me. He said: “Oh dear, haven’t we rescued him enough times already?”

    Now I hope you will ponder and pray and come to a basic understanding of fundamental things and that unless and until you can on all points, you will remain silent on those where differences exist between you and the Brethren. This is the course of safety. I advise you to pursue it. If you do not, perils lie ahead. It is not too often in this day that any of us are told plainly and bluntly what ought to be. I am taking the liberty of so speaking to you at this time, and become thus a witness against you if you do not take the counsel.

    I repeat: I have every good wish for you, pray that the Lord will bless you and hope that things will work out properly and well in your life.



    Bruce R. McConkie


    P.S. I am taking the liberty of sending copies of this response to those to whom you sent communication

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