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Oranges are not7/5/2023 ![]() ![]() ![]() It is the arrangement that is the investment contract! They are offering an opportunity to contribute money and to share in the profits of a large citrus fruit enterprise managed and partly owned by respondents. The respondent companies are offering something more than fee simple interests in land, something different from a farm or orchard coupled with management services. The transactions in this case clearly involve investment contracts, as so defined. In other words, an investment contract, for purposes of the Securities Act, means a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party. ![]() The legal issue, in this case, turns upon a determination of whether, under the circumstances, the land sales contract, the warranty deed, and the service contract together constitute an “investment contract” within the meaning of § 2(1). These 3 quotes neatly summarize the case: Nonsense! Let’s take a look at what the Supreme Court actually said. People constantly raise the fact that Howey was originally decided in 1946, as if that means it will have done a bad job setting a test that works today. I implore the plaintiffs’ bar and the SEC to stop the madness and return to Howey. ![]()
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