Civil Procedure, MLM Consulting / Network Marketing, Securities Law

Chapman v. Rudd Paint and Varnish , 409 F.2d 635 (1969)

Chapman v. Rudd Paint and Varnish

by Babener & Associates on 12/27/2011

The Ninth Circuit held that the promotional brochure was not part of the agreement, and contained fundamental elements that did not create a security as defined by federal law. The distributor agreement specified that the...more

Bond v. Koscot , 276 So.2d 198 (1973)

Bond v. Koscot

by Babener & Associates on 12/27/2011

The Court of Appeals ruled that the District Court erred when it did not consider the distributor agreement between Koscot and Bond to be a security. Bond signed a distributor agreement, authorizing her to purchase cosmetics...more

SEC v. International Heritage, Inc., 4 F.Supp.2d 1378 (1998)

A contract, scheme or transaction whereby a downline invests services, but not money, in a common enterprise, and expects a return...

by Babener & Associates on 4/22/1998

The Securities & Exchange Commission brought suit against International Heritage, Inc. (IHI) for various securities violations and obtained an injunction, partly relating to the compensation plan. IHI tendered a modified...more

Harrison v. Dean Whitter Reynolds, Inc., 79 F.3d 609 (1996)

Harrison v. Dean Whitter Reynolds, Inc.

by Babener & Associates on 3/20/1996

Kenning and Carpenter worked for Dean Witter Reynolds. They told over 100 clients (including Plaintiff Henderson) that, as Dean Witter employees, they had access to discounted municipal bonds and would buy them on behalf of...more

In re Omnitrition International Inc. Securities Litigation, 1994 WL 655897 (1994) (Not reported)

Is the Omnitrition program a security subject to regulation under federal securities laws?

by Babener & Associates on 8/10/1994

The District Court granted summary judgment in favor of Omnitrition and dismissed the claim. The court found that Omnitrition had adopted programs that previous court decisions had found to be conclusive evidence that an...more

Reed v. Palmer

Does the dismissal of a pendant state securities claim in federal court act as an adjudication on the merits for res judicata...

by Babener & Associates on 8/13/1993

The Louisiana Supreme Court ruled that because the federal court had pendant jurisdiction over the state law claims arising out of the same transaction as the federal claims, the plaintiff is barred res judicata from bringing...more

Matek v. Murat, 862 F.2d 720 (1988)

Are the partnership interests securities under the federal securities laws?

by Babener & Associates on 11/25/1988

The 9th Circuit Court of Appeals decided that the focus of the analysis should be on the expectations the parties had in the original transaction. To determine the expectations, the court looked at the terms of the contract,...more

Wright v. Schock, 571 F.Supp. 642 (1983)

Is a scheme a "common enterprise" if the factor linking the fortunes of the parties is at the option of one of the parties?

by Babener & Associates on 6/30/1983

Golden State Home Loans (GSHL) was a broker and servicer of loans secured by deeds of trust on real property. The Wrights invested in GSHL's loans. GSHL had a policy of advancing payments to its investors if the mortgagee...more

Wright v. Schock, 571 F.Supp. 642 (1983)

Is a scheme a "common enterprise" if the factor linking the fortunes of the parties is at the option of one of the parties?

by Babener & Associates on 6/30/1983

Golden State Home Loans (GSHL) was a broker and servicer of loans secured by deeds of trust on real property. The Wrights invested in GSHL's loans. GSHL had a policy of advancing payments to its investors if the mortgagee...more

Mitzner v. Cardet International , 358 F.Supp. 1262 (1973)

Is a franchise a security when the franchisor selects and controls substantially all aspect of a door-to-door marketing scheme?

by Babener & Associates on 5/17/1983

he District Court held that the scheme was a security within the meaning of the Securities Act of 1933. The court found persuasive an SEC ruling declaring pyramid programs to be investment contracts, and hence securities....more

Villeneuve v. Advanced Business Concepts, 698 F.2d (1983)

Does a security result from an agreement where the profits come "solely" from the efforts of others, or may it instead come "from...

by Babener & Associates on 2/22/1983

A panel of the Appeals Court upheld the standard from the US Supreme Court in W.J. Howey that a security's profits should come "solely" from the efforts of others. Villeneuve bought a distributorship and was given the...more

Martin v. T.V. Tempo

Is an agreement granting an exclusive territory to operate a franchise in an "investment contract" for federal securities law...

by Babener & Associates on 10/23/1980

The Court of Appeals upheld the district court ruling that the agreement in question was not an "investment contract". Plaintiffs paid T.V. Tempo for the right to publish a television programming guide in an exclusive...more

Piambino v. Bailey, 610F.2d 1306 (1980)

Under what circumstances is summary judgment proper securities case involving an MLM Company?

by Babener & Associates on 2/6/1980

The Court of Appeals held that given the facts in the record of the District Court, the granting of summary judgment on the claim of a securities law violation was improvident because a judge or jury could reasonably view the...more

Colorado v. Blair , 579 P.2d 1133 (1978)

Colorado v. Blair

by Babener & Associates on 6/5/1978

Blair was convicted of willfully selling unregistered securities in violation of Colorado law. He was director of several charitable organizations that operated as a single unit and paid out investment gains with funds...more

Crowley v. Montgomery Ward & Co., Inc. , 570 F.2d 877. (1978)

Crowley v. Montgomery Ward & Co., Inc.

by Babener & Associates on 2/3/1978

Crowley sued Montgomery Ward claiming that their catalog sales agency agreement was a security sold in violation of US securities laws. The agreement allowed the agent the right to use Montgomery Ward intellectual property,...more

In Re Bestline Products Securities and Antitrust Litigation , 412 F.Supp 732 (1976)

Are the distributorships of Bestline a security for federal securities law purposes?

by Babener & Associates on 8/10/1976

The District Court adopted the reasoning of the Ninth Circuit in Glen Turner and ruled that the distributorships of Bestline were securities because the profits that were derived from them were to come substantially from the...more

Plum Tree v. Seligson , 383 F.Supp. 307 (1974)

What differentiates a franchise from an investment contract, a type of security?

by Babener & Associates on 10/21/1974

The District Court held that, according to the US Supreme Court in Howey, an investment contract is an investment of money in an enterprise with an expectation of profit solely from the efforts of others. The agreement with...more

Davis v. Avco Financial Services, 739 F2d 1057 (1984)

by Babener & Associates on 7/10/1974

he Court of Appeals held that a person is liable as a "seller" of a security if they were the proximate cause the securities sale. An Avco loan officer became involved with Dare to be Great, a program that was found to be a...more

Davis v. Avco Corp. , 371 F.Supp 782 (1974)

Davis v. Avco Corp.

by Babener & Associates on 1/11/1974

The District court denied Avco's motions to dismiss for lack of subject matter jurisdiction and for failure to state a claim because the complaint properly alleged all the necessary elements of a claim of securities fraud and...more

Lino v. City Investing

Is the giving of a personal promissory note in consideration of a business enterprise the purchase of a security governed by...

by Babener & Associates on 8/20/1973

The Court held that neither the underlying agreement, nor the promissory note were securities as defined by federal law. Lino claimed that the agreement should be treated as an investment contract under the Howey line of...more

Chapman v. Rudd Paint and Varnish , 409 F.2d 635 (1969)

Bond v. Koscot , 276 So.2d 198 (1973)

SEC v. International Heritage, Inc., 4 F.Supp.2d 1378 (1998)

Harrison v. Dean Whitter Reynolds, Inc., 79 F.3d 609 (1996)

In re Omnitrition International Inc. Securities Litigation, 1994 WL 655897 (1994) (Not reported)

Reed v. Palmer

Matek v. Murat, 862 F.2d 720 (1988)

Wright v. Schock, 571 F.Supp. 642 (1983)

Wright v. Schock, 571 F.Supp. 642 (1983)

Mitzner v. Cardet International , 358 F.Supp. 1262 (1973)

Villeneuve v. Advanced Business Concepts, 698 F.2d (1983)

Martin v. T.V. Tempo

Piambino v. Bailey, 610F.2d 1306 (1980)

Colorado v. Blair , 579 P.2d 1133 (1978)

Crowley v. Montgomery Ward & Co., Inc. , 570 F.2d 877. (1978)

In Re Bestline Products Securities and Antitrust Litigation , 412 F.Supp 732 (1976)

Plum Tree v. Seligson , 383 F.Supp. 307 (1974)

Davis v. Avco Financial Services, 739 F2d 1057 (1984)

Davis v. Avco Corp. , 371 F.Supp 782 (1974)

Lino v. City Investing

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