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:

Genetic Counseling

Clinical service that advises prospective parents of their probable risk of having children with hereditary defects.

Inherited Conditions

Disorders or traits passed from parents to offspring through genes.

Atomic Sentences

Simple sentences that contain no logical connectives or only singular propositions without further decomposition.

Truth Values

The valuation of a statement or proposition in logic, indicating whether it is true or false.