Mark Hubbard Has Been Very Successful in the Cattle Business

question 38

Essay

Mark Hubbard has been very successful in the cattle business over a number of years. Hubbard has decided to establish a cattle program as an investment tool. He will purchase cattle with investors' money and then provide medical care, feed, and transportation on a service contract basis. The profits then will be divided proportionately among the investors. An investment company, Money Ventures, Inc., is interested in the entire offering of Hubbard's cattle program. Hubbard is unsure as to whether the securities acts apply to him. In addition, he wonders whether his venture, as structured, is exempt if the activity is within the securities acts. Should Hubbard be concerned?

---

Definitions:

Crop

Of birds and some invertebrates, an enlarged portion of the esophagus that stores food.

Birds

Warm-blooded, feathered vertebrates with beaks, laying hard-shelled eggs, and capable of flight in most species.

Food Storage

The practice of keeping food in certain conditions to prevent spoilage, contamination, and to extend its shelf life.

Bile

Mixture of salts, pigments, and cholesterol produced in the liver, then stored and concentrated in the gallbladder; emulsifies fats when secreted into the small intestine.