Raymond Lee Organization, Inc. v. Division of Securities (1976)

Are the inventors who submit their inventions and Raymond Lee engaged in a "common enterprise?"

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Raymond Lee Organization, Inc. charged independent investors to bring inventions to market. Inventors could submit their inventions to Raymond Lee Organization, and in exchange for both a fee and a percentage interest in the invention, Raymond Lee Organization would perform patent research, develop the product, prepare a patent application, sales letter and prospectus, negotiate with manufacturers and market the invention. The Colorado Securities Commissioner determined Raymond Lee Organization was selling investment contracts, and therefore unregistered securities, because the Raymond Lee Organization was a common enterprise in which a person invests money and expects a return based upon the efforts of another. The Commissioner issued a cease and desist order for selling unlicensed securities, and Raymond Lee Organization challenged the order.

Case summary is also available online at: http://www.mlmlegal.com/legal-cases/RaymondLeeOrganizationInc_v_DivisionofSecurities-1976.php

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