SEC v. Better Life Club, Inc.

Does the short maturity time of the "Advertising Pool" program exempt its notes from registration requirements under Federal securities laws?


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 pool shortly had outstanding obligations to investors of $51.6 million on assets of $2.7 million. The SEC sued, alleging that the "Advertising Pool" was a Ponzi or pyramid scheme and charged Taylor and Better Life Club with selling unregistered securities and securities fraud. Defendants claimed that since the Advertising Pool notes had a maturity of 60 to 90 days they fell into the commercial paper exemption, which exempts certain commercial paper that has a maturity of less than nine months from registration requirements.

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Reference Info:Federal, D.C. Circuit, D.C. | United States

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