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 solely for the efforts of another, can be a regulated security.

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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 compensation plan to the court and requested relief from the injunction. The modified plan did not require an investment of money, but the SEC argued that an investment of services was sufficient to trigger application of the federal securities laws.

The full case and case summary also available online at: http://www.mlmlegal.com/legal-cases/SEC_v_InternationalHeritageInc.php

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Published In: Civil Procedure Updates, MLM / Direct Sales Updates, MLM Consulting / Network Marketing Updates, Securities Updates

Reference Info:Federal, 11th Circuit, Georgia | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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