(dissenting).
If I could find any credible evidence to support it, I would concur in this decision. I do have the utmost and profound respect for the wisdom and general fairness of my judicial superiors on this panel, as well as for my senior brother who decided this case below; and I confess a very strong desire to vote for affirmance of a district judge, especially on an evaluation of evidence; and I do feel the natural sympathy for each of the several hundred persons who were defrauded so grossly by Mr. Dob-ich. However, I am simply unable to substitute these feelings for the mini*156mum evidence of fault I believe is and should be necessary to establish liability. I must respectfully dissent.
It seems to me that the trial judge’s Memorandum of Decision itself (286 F. Supp. 702) shows that the decision rests on a compounding of wholly unjustified inferences and upon pure speculation, and that it results in creation of tort liability without any real suggestion of fault in the evidence. It also seems to me that the majority opinion here, while enunciating sound but inapplicable principles of law in scholarly fashion, fails to come to grips either with the real questions of proof involved or the unsound process of reasoning employed below. Judge Swygert states that conclusions must be arrived at by “logical deduction.” I agree. I would most certainly not undertake to resolve testimonial conflicts on appeal, but I must disagree with the logic of the deductions which led to this judgment. It is respectfully observed that simply saying conclusions have been derived from much complex evidence neither makes that statement true nor makes those conclusions logical.
It is now abundantly clear (as correctly found and related by the trial judge) that, at the time of his death in July 1965, Mr. Michael Dobich1 had failed to make delivery of many thousands of shares of Midwestern stock, for which some several hundred customers had paid him approximately $2,900,000; that he had pursued a consistent practice of making fraudulently short sales of this as well as other stocks to a great many people; that he had violated the securities laws and regulations of his state and nation most grossly; and that his corporation was actually deeply insolvent before there was any contact between him and the defendant. It seems equally clear to me that there is simply no evidence whatsoever in the record that the defendant, Midwestern, had any actual knowledge or even any faint suspicion of his financial condition or his operations, or that it was in any way involved with Dobich (or in any way connected to this fraudulent mess), except in a few very definite and specific ways which are undisputed in the record. The whole fabric of the decision rests on those involvements and connections, not on conflicts in testimony. One may refuse to believe all of defendant’s witnesses and accept implicitly all of the competent testimony of plaintiff’s witnesses and still there is simply nothing to suggest more than a highly speculative possibility that defendant could have any knowledge of any fraud, much less that it engaged in any intentional aiding or abetting thereof.
Furthermore, the trial judge did a thorough job of canvassing an immense trial record for the true facts disclosed thereby and a conscientious job of relating all of the evidence that was in any way significant in his memorandum. I have found nothing of significance, which could conceivably lend support to the decision, which the trial judge did not relate. It does not seem to me that the majority opinion here states anything additional.
Boiled down, the analysis of the evidence and the process of reasoning employed by the trial judge is, that since Midwestern’s top management knew from the Dellwo incident in June, 1964, and the subsequent events from August to December 1, 1964, that Dobich had once permitted what the Indiana Securities Commissioner called “rumors” and “unreasonable spreads,” that Dobich was concentrating a sales effort on Midwestern stock, that he had been late in deliv*157ering stock to some ten customers (all of which was eventually delivered), and that he had concocted false reasons for his lateness, they “knew well before November 30, 1964 that Dobich was dealing in a fraudulent manner with his customers’ money.” The majority opinion here goes further to find that this all shows it reasonable to conclude that Midwestern management knew “he was selling Midwestern stock which he did not own and did not then have funds to purchase.” These conclusions seem to me to be monumental non sequitur in relation to the stated premises. There is simply nothing here to suggest damaging fraud, much less anything whatsover about Dobich’s financial condition. Such knowledge of fraud on the part of the Indiana Securities Commissioner is not inferred, yet the record shows clearly and beyond dispute that the Commissioner had received numerous complaints of late delivery of various stocks by Dobich, going back to 1962, which he accumulated in one Dobich file but considered completely resolved in each instance by subsequent delivery.
It is certainly recognized that any single day any broker has his customers’ money, before he buys the stock for which the money was paid, he may be, and presumably is, using that money as working capital. Any abnormal delivery delay suggests a “short sale” to any knowledgeable person. ■ This simply does not suggest fraud, however, or make a short sale fraudulent. There simply is no harm of any kind to the purchaser who ultimately receives his stock, unless there is no accounting for intervening dividends or he is unable to sell the stock when he wants to because he doesn't yet have it. There is no suggestion of either circumstance here. Presumably that’s why “lateness,” which was crowned by eventual delivery, didn’t excite the Indiana Securities Commissioner, whose office exists to police such things.
An inference of any knowledge of actual Dobich fraud by Midwestern on the evidence here, therefore, seems totally unwarranted and very unjust. It is noted particularly, however, that the trial judge doesn’t suggest ground even for any suspicion, either by Midwestern or the Indiana Securities Commissioner, that Dobich was vastly short and unable to deliver at any point, because he actually was observed to deliver regularly, in substantial volume long after November 30, 1964, on complaints received either by the Commission or Midwestern and referred to Dobich with a demand for delivery. There were 22 such to the Commission after December 1, 1964, leading to transfers up to two days before Dobich’s death in July, 1965.
The stipulated fact that Dobich was responsible for actual transfer on the books of Midwestern of 22,319 shares for 362 people between May and December, 1964, hardly makes “lateness” in ten cases look like he couldn’t deliver, especially when he did quickly deliver on complaint. This suggests only that he could do so. Long and detailed judicial recitations of Dobich’s “lulling” tactics to many other customers not known to Midwestern, and of the depth of his actual insolvency known only to himself at that time, contribute nothing to showing guilty knowledge of this defendant.
From this wrongly inferred and thus false premise of known Dobich fraud on or before November 30, 1964, however, and the obvious fact that Midwestern’s officers rather naturally liked to see- a high market for its stock, the trial judge reasons that Midwestern’s officers’ failure to notify the Indiana Securities Commissioner of complaints of late deliveries by Dobich, coupled with their notification to Dobich of such with a simple demand for delivery, on penalty of report for failure, substantially encouraged Dobich and thus amounted to aiding and abetting his fraud, because if they had told the Securities Commissioner what they knew, we are told he would have put Dobich out of business in December, 1964. The majority here finds in this picture, without relating *158evidence of it, a “plan” on the part of Midwestern “to aid and abet Dobich in his fraudulent activity.”
These conclusions seem to me to rest on nothing but pure judicial speculation and conjecture and to be directly contrary to the only logical inferences which are possible from the evidence. Nothing in the letter to Dobich of November 30, 1964, concerning the Dillon complaint, or the letter of December 1, or subsequent practice, in any way retracted previous threats of exposure to the Indiana Securities Commission or indicated the slightest toleration of late delivery of Midwestern shares. I simply am unable to comprehend how they could have, as my esteemed brothers in the judiciary have said they did, in any way amount to a “signal” or indicate to Dobich in any manner either that he was thenceforth free of the previous threat or what Midwestern would do or would not do on any future complaint. On the contrary, the opposite inference seems unavoidable from the evidence, that this practice simply saved one step in correspondence because it did obtain delivery of the shares involved, which, as clearly shown by the Indiana Securities Commissioner’s own testimony and his file record, was the maximum extent of his interest in late delivery complaints. His statement that had he been advised of the nine complaints of late, but eventual, delivery which came to Midwestern over the period of four months prior to December 1, 1964, he would have instituted an audit and revoked the Dobich license, seems to me nothing short of ridiculous in view of the facts that he had never done that in any case in his four-year tenure, that he had “by far” more work than he could handle generally, that this action would have required a special administrative appropriation for auditors, and that he didn’t do it at any time thereafter, in spite of the twenty-two complaints he did receive about Dobich thereafter. Not only is this self-serving assertion not testimony of a fact within the knowledge of the witness, but it seems much more like a whimsical wish of what might have been had he followed the clues it is now said Midwestern should have followed. Fraud such as this naturally seeks a scapegoat, and one with an apparently deep pocket is naturally most desirable. His “would have” action is wholly belied by his prior and subsequent practice, and this “testimony” seems to me so tainted by hindsight and so speculative as to be completely beyond serious judicial reliance as evidence. Yet the trial judge and the majority here treat this assertion as the certainty which supports the whole theory of causal connection and thus of “aiding and abetting” on which liability is founded.
It is respectfully suggested that the reasonable presumption that public officials discharge their official duties hardly survives undisputed evidence that the official involved has not done on twenty-two later complaints the very act sought to be presumed that he would have done if he had known of nine earlier complaints.
Some suggestion is made that notice from Midwestern to the Commissioner of late delivery by Dobich would have had, and could reasonably have had, greater weight than such notice from other sources, such as the investors themselves. Any logic or justice in that idea escapes me completely. It seems clear that the total failure by anyone to discover the facts behind the complaints was the important thing lacking here, and not who might have made complaints to the Commissioner. It is apparent that the Commissioner knew more than Midwestern, about more cases of lateness and over a longer period. He had a public duty to perform. Midwestern management had an insurance company to run as well as supposed shareholders to keep happy. That was their primary duty. The plaintiff here and others in her class could also have complained to the Commissioner. The sad fact is that most of them didn’t, and the Commissioner didn’t do what he could have done even though he had far more reason to have a suspicion of fraud than *159Midwestern is now told amounts to knowledge of fraud and aiding and abetting on its part. The fact that the Commissioner didn’t suspect what Dobich was actually doing, as nobody did, and hence didn’t take the action he alone could take, is a tragedy precipitated by a very busy and clever confidence man; but I am wholly unable to pretend that his whimsical wish and his finger pointing can somehow justify judges in finding one person (Midwestern), who simply didn’t tell him all they knew, liable to several hundred others who didn’t either. The folks in plaintiff’s class didn’t notify Midwestern!
Midwestern’s action on a late delivery complaint always consisted of taking prompt action to see that Dobich did make delivery to persons it was informed had bought its stock from him. Its failure to suspect fraud is far less culpable than the same failure on the part of the Indiana Securities Commissioner because it had less to go on. Its action in obtaining delivery simply did not help Dobich in any way to “lull” others or to avoid complaints to the Commissioner by others.
The trial court says that, because Dobich’s explanations of slow delivery were not truthful, as intelligent and responsible businessmen, Midwestern management “must have realized that there were others who had purchased shares from Dobich without getting delivery.” That seems patent non-sequitur on its face; and it is beyond my comprehension how Dobich’s actual delivery after complaint, and sometimes before or coincidental with complaint, can possibly be thought to suggest anything but slow delivery which did regularly become actual delivery. It just doesn’t suggest non-delivery or inability to deliver. It suggests the opposite. It must not be overlooked, as noted above,- that Dobich, in this period from May through December, 1964, made 362 transfers of Midwestern stock involving 22,319 shares. Prom January through July, 1965, he made 899 transfers involving 48,409 shares. How fast or slow they were was not known to Midwestern, except for the few who complained of slow delivery and then received their shares. This simply does not suggest in the slightest way, however, that some unknown other people weren’t getting the shares they had bought from him. The knowledge that everyone now has, that many people were not, is simply not chargeable injustice to anyone but Dobich. in November, 1964.
There is nothing but the trial judge’s pure conjecture (and the Indiana Securities Commissioner’s incredible self-serving “would have” statement at the trial several years later) to indicate that Midwestern’s program for obtaining delivery from Dobich “was much less likely to result in curtailment of Dobich’s activities than a report to the Commission would have been.” According to all available evidence at the time, and all credible evidence at the trial, the programs of the Indiana Securities Commissioner and Midwestern, on receipt of a complaint for late delivery of shares by Dobich, were identical, i.e., write Dobich and demand delivery on threat of legal action and chalk that problem down as successfully solved when delivery was made thereafter. How any inference can possibly be drawn that earlier curtailment of Dobich’s activities even might have been achieved by report of a few more late deliveries to the Commissioner seems absolutely preposterous to me.
Without evidence of knowledge of Dobich’s fraud by Midwestern and some action or inaction by Midwestern which really did aid or abet that fraud, liability is unsoundly held. There must be some credible evidence of both. Here there seems to me no evidence or logical inference of either. Even if both inferences, which seem the antithesis of logic, however, are accepted, the decision runs afoul of the principle that justice does not permit' compounding of inferences. See United States v. Ross, 92 U.S. 281, 283-284, 23 L.Ed. 707. The decision *160here seems to pile illogical inferences to a depth of confusion and thus seems to me wholly unsound.
It is suggested by the trial judge and the majority here that Midwestern gained, or may have sought to gain, a benefit by protecting Dobich, in that putting him out of business while he was dealing heavily in its stock would have caused a decline in its market value and been embarrassing in merger negotiations. While possibly true, that simply suggests a possible motive and contributes nothing by way of evidence to indicate knowledge of fraud or aiding and abetting its perpetration. The compounding of invalid inferences as to knowledge and help is not supported in the slightest by further speculation as to motive. This also overlooks completely that Dobich could not prop up the price of Midwestern shares by any shares he was selling until he did buy to cover his sales. If Midwestern had had any idea that he was not buying any substantial number of shares for which he was absorbing market demand by sales, they could not have thought, and I don’t see how judges can think, he was supporting the market price. The opposite would be true. If his visible activities were notice that he was holding up the market price, they just can’t also be notice of his fraud.
I find it completely impossible to infer in the slightest degree from any evidence in the record here that Midwestern’s effective action to get delivery of its stock to purchasers thereof who complained to it amounted “to a tacit agreement with Dobich to prevent complaints from reaching the Commission, thus facilitating the fraud and allowing Dob-ich’s scheme to continue to Midwestern’s benefit,” as stated in the majority opinion. Such a conclusion seems to me not to follow logically from any stated premise, and from my understanding of the record, it seems based upon absolutely nothing but judicial suspicion, conjecture and speculation. Such a conclusion, unsupported by any reasonable inference from evidence, gains no validity by repetition.
While a trial judge’s findings of fact, if there is substantial evidence to support them, are entitled to great weight, reversal should take place where the trial court misapprehended the effect of undisputed evidence. Hart v. Gallis, 275 F.2d 297, 299 (7th 1960). See also Wigginton v. Order of United Commercial Travelers, 126 F.2d 659, 661 (7th 1942), cert. den., 317 U.S. 636, 63 S.Ct. 28, 87 L.Ed. 513, and Pflugradt v. United States, 310 F.2d 412, 415 (7th 1932).
Justice does simply not permit blame to be based solely on conjecture in the guise of inference. Moore v. Chesapeake & Ohio Ry Co., 340 U.S. 573, 578, 71 S.Ct. 428, 95 L.Ed. 547 (1951); Iwaniuk v. Bethlehem Steel Corp., 402 F.2d 309, 311 (7th 1968); Euson v. Starrett, 277 F.2d 73, 75-76 (7th 1960). Disbelief of defensive testimony simply doesn’t supply affirmative evidence of fault or wrongdoing which is needed to support a judgment of liability. Moore v. Chesapeake & Ohio Ry. Co., 340 U.S. 573, 576, 71 S.Ct. 428, 95 L.Ed. 547; Bankers Life & Cas. Co. v. Guarantee Reserve, 365 F.2d 28, 33-34 (7th 1966), cert. den., 386 U.S. 913, 87 S.Ct. 862, 17 L.Ed.2d 785 (1967).
The undisputed evidence shows clearly that what Midwestern is accused of doing affirmatively here is exactly what the Indiana Securities Commissioner always did on complaints of late delivery. That is simply not evidence of knowledge of or complicity in Dobich’s fraud on the part of either. The only failing of which Midwestern is accused is failing to report each complaint of late delivery to the Commissioner. That it admittedly didn’t do. Neither did the plaintiff. Instead, Midwestern did what the Commissioner almost certainly would have done. The only legal duty to make such a report on which we are told is a completely fictitious one supposedly created by Midwestern’s own threat to do so and supposed knowledge of the fraud, which the evidence clearly shows no one *161really had. I can find no evidence of any knowledge or suspicion on the part of Midwestern of Dobich’s fraud prior to his death, or any basis for inference thereof. I can find no evidence or basis for inference that Midwestern contributed anything to it, intentionally or otherwise.
While I agree that the issue of any affirmative misconduct by Midwestern was properly before the trial court, for the reasons stated in the majority opinion, I cannot agree that any such was proved or even reliably suggested, or that any case whatsoever for liability has been made against Midwestern here. For the reasons stated herein, I would reverse the judgment and dismiss the complaint with prejudice.
. It seems unnecessary to distinguish for any purpose here between Mr. Dobich and Dobich Securities Coloration, through which his fraudulent depredations may all nominally have been carried out. He controlled the operation completely and was apparently a skilled “confidence man” of the first magnitude. He “conned” liis own salesmen. The trial judge is impressed that a Midwestern officer began a letter to him “Dear Mike,” after a single meeting, but does not notice that the Indiana Securities Commission also addressed him this way on occasion.