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 paid late, at GSHL's option. GSHL ran into financial difficulty, eventually dipping into escrow accounts to advance payments to investors, bouncing checks, and then entering receivership. Wrights sued the president of GSHL, Schock, alleging violations of securities laws. Schock claimed the investments were not securities because GSHL only made advances on delinquent payments at its option the endeavor lacked the dependency of fortunes necessary to make a common enterprise.
Full case and case summary also available online at: http://www.mlmlegal.com/legal-cases/Wright_v_Schock.php
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