The 5th Circuit Court of Appeals reversed a district court’s order granting the SEC summary judgment based upon a finding that certain oil and gas interests were securities. The 5th Circuit provides a detailed analysis of whether the partnership interests satisfy the Howey test. This is well covered in Thomas Gorman’s blog SEC Actions @secactions and should be of interest to folks in the cryptocurrency and blockchain space.

“A central question in all of the crypto currency actions brought by the Commission is whether the interests being offered to investors are in fact securities. The seminal decision is, of course, the 1946 decision of the Supreme Court in SEC v. W.J. Howey Co., 328 U.S. 23. If the interests being offered to investors meet the Howey test they are investment contracts which come within the definition of the term security in the Securities Act as well as the Exchange Act. While that test can appear straight forward, in practice its application can be difficult as illustrated by a recent decision by Fifth Circuit, centered on whether the interests being sold in an oil and gas offering were securities. SEC v. Arcturus Corporation, No. 17-10503 (5thCir. Jan. 7, 2019).”

Just cuz the SEC says it is security, doesn’t mean it is

Thanks to Thomas Gorman for his post on this topic.

Lisa Bragança recovers losses for investors all over the country, protects whistleblowers, and defends individuals and businesses in government investigations. As a Branch Chief with the SEC Division of Enforcement, Lisa conducted and supervised insider trading investigations and a wide range of investment fraud and Wall Street misconduct. Lisa represents participants in the digital coin/cryptocurrency industry.

You can reach Lisa at (847) 906-3460 or

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