Howey Test and other

Based on an analysis of American lawyers from the company Debevoise & Plimpton LLP.

1. Howey Test History

 

The Howey test is a test created by the Supreme Court to determine whether certain transactions qualify as “investment contracts”. If so, then in accordance with the Securities Act of 1933 and December 19, 2010.
In 1946, the Supreme Court considered the case (SEC v. Howey), touching whether the lease agreement was a legitimate investment contract (one type of investment that is listed as “security” under the Acts). In Howey, two business defendants from Florida offered real estate contracts for plots of land with citrus groves. The defendants offered the buyers the opportunity to rent any purchased land back to the defendants, who would then strive for land, harvest, pool and sell citrus fruits. Since most buyers were not farmers and did not have agricultural expertise, they were happy to return the land back to the defendants.

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