Before SWAN, AUGUSTUS N. HAND, and PATTERSON, Circuit Judges .
AUGUSTUS N. HAND, Circuit Judge .
The defendants Minuse and Pelletier were indicted under section 88 of Title 18 of the United States Code, 18 U.S.C.A. § 88, for conspiring with other persons to violate the provisions of the Securities Exchange Act of 1934, 15 U.S.C.A. § 78a et seq., prohibiting the manipulation of security prices on a National Securities Exchange. Those provisions read as follows:
Sec. 9 [ § 78.] (a). It shall be unlawful for any person, directly or indirectly, by the use of the mails or any means or instrumentality of interstate commerce, or of any facility of any national securities exchange, or for any member of a national securities exchange -
(1) For the purpose of creating a false or misleading appearance of active trading in any security registered on a national securities exchange, or a false or misleading appearance with respect to the market for any such security, (A) to effect any transaction in such security which involves no change in the beneficial ownership thereof, or (B) to enter an order or orders for the purchase of such security with the knowledge that an order or orders of substantially the same size, at substantially the same time, and at substantially the same price, for the sale of any such security, has been or will be entered by or for the same or different parties, or (C) to enter any order or orders for the sale of any such security with the knowledge that an order or orders of substantially the same size, at substantially the same time, and at substantially the same price, for the purchase of such security, has been or will be entered by or for the same or different parties.
(2) To effect, alone or with one or more other persons, a series of transactions in any security registered on a national securities exchange creating actual or apparent active trading in such security or raising or depressing the price of such security, for the purpose of inducing the purchase or sale of such security by others.
The indictment in substance alleged as particulars of the conspiracy:
(1) That the defendants through instrumentalities of interstate commerce would effect transactions in stock of Tastyeast, Inc., which involved no change in the beneficial ownership; 
(2) That defendants would enter numerous orders for Tastyeast stock with the knowledge that orders of substantially the same size would be entered by them or their agents at substantially the same time for the purpose of creating a false and misleading appearance of active trading in the stock;
(3) That the defendants would create actual or apparent active trading and raise the price in the Tastyeast stock for the purpose of inducing the purchase of the stock by others;
(4) That the defendants would obtain an option on 73,000 shares of Tastyeast stock and on the basis of the inflated exchange prices and activity would sell the stock over the counter, a considerable portion of which they had taken at lower prices under the option;
(5) That the defendants would pay secret bonuses to customers men and other persons to induce purchases of Tastyeast stock and would induce friends and associates by means of guarantees against loss and rebates or discounts on the purchase price to purchase Tastyeast stock and thereby raise and inflate the price of the security.
After a statement of the factum of the conspiracy some twelve overt acts were set forth in the indictment. The conspiracy originated from an agreement dated September 17, 1935, by one Levy to purchase 79,000 shares of Tastyeast stock from that company. Levy was to buy the stock at prices ranging from $2.50 to $3.25 per share, less 20 percent selling commissions. On November 16, 1935, the shares under this option were registered with the Securities and Exchange Commission and approved by it for listing on the New York Curb Exchange. In October, 1935, Levy met Minuse and Pelletier, and on November 18, 1935, made a contract with N.W. Minuse & Co. (the defendant's firm) whereby the latter were to take up 73,000 of the shares covered by this option for 79,000 at prices ranging from $2.50 to $3.25 less 15 percent commissions in marketing the stock. The firm of Minuse & Co. had in its employ one Stuart who was a market letter writer and a so-called statistician. He was one of the defendants named in the indictment and pleaded guilty. The firm had a financial backer named Trezise who was the cashier of a small bank in Pennsylvania from which he stole approximately $130,000, a large amount of which he diverted to the use of the Minuse firm.
The total issue of the stock of Tastyeast was 260,000 shares. During the period from October, 1935, to January 9, 1936, 103,400 shares of Tastyeast stock were traded in on the New York Curb. Of this total Minuse & Co. purchased 25,600 shares or 24.8 percent, and sold 35,200 shares or 34.1 percent. During the period from March 6, 1936, to April 25, 1936, 89,300 shares were traded in on the Curb and the purchases and sales of Minuse & Co. were approximately 37 percent of the total trading. The price of the stock rose in the first period from $1 5/8 to 3 3/4, and in the second period it rose from 2 3/4, on March 7, to a high of 4 1/8 on March 23, 1936. This large amount of trading by Minuse & Co., accompanied by rising prices resulted in publicity and stimulated the public to enter the market. One of the methods by which manipulation of the market was promoted by Minuse & Co. was by "wash sales" in which the ownership of the stock did not change; another was by matched purchases and sales, i.e., orders given for a purchase with the knowledge that other persons would give orders for sales in substantially the same amounts at about the same time. Various persons acting as dummies for Minuse & Co. were told to buy the stock while at the same time ...