The 1933 Securities Act Defines the Term "Security

question 73

Essay

The 1933 Securities Act defines the term "security." The Supreme Court of the United States has adopted a two-tier analysis of what constitutes a security. Within this analysis the Court has used a three-part test to determine whether a non-traditional financial transaction constitutes an investment contract and thus a security. Explain
(a) the 1933 Act's statutory definition of security,
(b) the courts' general interpretation of the 1933 Act's definition and
(c) the Supreme Court's two-tier test. Use case law to illustrate your explanation, if appropriate. Also, why do you think the Supreme Court had to devise such an analysis?

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Definitions:

Adults

Individuals who have reached maturity and are considered capable of making independent decisions.

Children

Young human beings who are in the stages of development from infancy to puberty.

Time

A continuous, irreversible progression through past, present, and future, serving as a fundamental dimension in which events occur sequentially.

Restless Legs Syndrome

A disorder characterized by an uncontrollable urge to move the legs, usually because of an uncomfortable sensation, typically occurring in the evening or night.