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Bruner v. Texas , 463 S.W.2d 205 (1970)

Bruner v. TexasTexas

Bruner was accused of selling unregistered securities in violation of Texas state law. Bruner sold soap in an MLM structure to Owens who bought into the program based on representations that he would not have to perform any...more

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

Chapman v. Rudd Paint and VarnishWashington

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. KoscotFlorida

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

Bell v. Virginia , 236 Va. 298 (1988)

Bell v. VirginiaVirginia

The Virginia Supreme Court held that the program was a pyramid scheme. The Company defended itself on the grounds that state statute required a pyramid program to receive consideration from a member to qualify as an illegal...more

Bell v. Health-Mor, 549 F2d 342 (1977)

Bell v. Health-MorLouisiana

The Court of appeals held that a claim that is plainly frivolous or insubstantial should be dismissed for lack of subject matter jurisdiction. The Plaintiffs successfully made a colorable claim that the payment of a finder’s...more

Arata v. Nu Skin International , No. 92-15380 (1993) (Not reported)

Arata v. Nu Skin InternationalCalifornia

The Court of Appeals was asked to determine the circumstances under which a class member can object to the settlement and certification of a mandatory class action. The case is also available at:...more

People v. Frederick

When can a judge restrict an expert witness as to the type of testimony to be given, and what is the standard for an "investment...California

The court held that an expert need not be given an unlimited scope on which they may testify and that an investment contract is the investment of money in an enterprise with the expectation of return, but without the ability...more

FTC and State of Maryland v. Jacobson (2005) , Civil Action No. 1:04-CV-1176-CCB

FTC and State of Maryland v. Jacobson (2005)Not Applicable

The FTC alleged in its complaint that Sandra Jacobson, through her participation in the Trek Alliance pyramid program, made deceptive claims about employment opportunities, earnings potentials, and promoted a pyramid program...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...Georgia

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

SEC v. Better Life Club, Inc.

Does the short maturity time of the "Advertising Pool" program exempt its notes from registration requirements under Federal...D.C.

The Better Life Club of America, Inc., offered people who paid $39 for membership an opportunity to join the "Advertising Pool," a "wealth-building project" which promised a double return on investment in 60 to 90 days. The...more

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

Harrison v. Dean Whitter Reynolds, Inc.Indiana

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

Webster v. Omnitrition, 79 F.3d 776 (1996)

Is Summary Judgment appropriate when a company pleads an "Amway safeguards defense?"California

The Court of Appeals held that to succeed on Summary Judgment by asserting an "Amway safeguards defense", a company must present evidence that their safeguards are actually effective in preventing inventory loading and...more

Tennessee v. Brewer

What is the proper definition of an investment contract? Tennessee

The Tennessee Supreme Court held that the proper definition of an investment contract is the definition espoused by the Supreme Court of Hawaii: (1) An offeree furnishes initial value to an offeror, and (2) a portion of this...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?California

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

New Mexico v. Danek

What is the proper definition of a security under New Mexico State law? New Mexico

The New Mexico Court of Appeals held that the definition of a security under New Mexico State law is the same a the definition of the Ninth Circuit in Glenn W. Turner, an investment of money with profits to come primarily...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...Louisiana

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

New Mexico v. Danek

What is the definition of a security for New Mexico State law purposes? New Mexico

The Court of Appeals held that the District Court had applied the correct definition of a security, and that the District Court's discretion concerning irregularities at trial should be respected. Danek was convicted on...more

SEC v. International Loan Network (1992), 968 F.2d 1304 (1992)

Did ILN sell "securities" in violation of federal law and is a preliminary injunction necessary?D.C.

The DC Circuit upheld the District Court ruling finding ILN's products were "securities" and subject to regulation by the SEC. The Defendants argued that the products were not securities because no money need be paid directly...more

Kansas v. Ridenhour

Is an airplane investment program a security, and can the promoters of the program be held liable as sellers of securities? Kansas

The Supreme Court of Kansas was asked if summary judgment was appropriate to determine that an airplane investment program was a security, and that the promoters of the program could be held liable as sellers of securities....more

SEC v. International Loan Network, Inc, 770 F.Supp 678

Do the facts of this case meet the standard for a preliminary injunction preventing the operation of a company that may be selling...D.C.

The DC District court held that the standard for issuing a preliminary injunction was a proper showing that "the evidence establishes a strong prima facie case of previous violations and a reasonable likelihood that the wrong...more

Probst v. Oklahoma

Can a partnership be a regulatable security if the partner had managerial authority on paper, but was unaware or never exercised...Oklahoma

Defendant Probst was in the business of estate planning. He advised clients to invest in a construction project undertaken by a firm he was intimately involved in, although that relationship was not divulged to the...more

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

Are the partnership interests securities under the federal securities laws?California

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

Trimble v. American Savings Life Insurance Company

Is American Savings entitled to have each investor’s claim individually litigated on the issues of reliance, causation,...Arizona

The court held that that American Savings was not entitled to have each investor’s claim individually litigated on the issues of reliance, causation, materiality and due diligence. The state filed suit against the company...more

Rose v. Texas

Does a public filing of financial information pertinent to the sale of securities give investors constructive notice of the...Texas

Rose was the president of a small oil and gas company. He was convicted for securities fraud relating to the sale of limited partnership interests in an oil well venture without disclosing to investors that the equipment and...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?California

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

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