Securities Litigation

The Securities Act of 1933's catchall for defining a security is the "investment contract." The landmark case, SEC v Howey, explained that "an investment contract for the 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 form the efforts of the promoter or a third party …" Here, the Howey Court held that selling shares in a citrus farm managed by the promoter was an investment contract. Under the Howey test, staking sports, poker, or fantasy sports gamblers (or a related ...