Continental Commodities ran afoul of the SEC, and was required to reimburse its former clients. For certain large clients, Continental issued 60% refunds and promissory notes for the remaining 40%, reserving cash for operations and legal fees. In exchange, these clients promised not to sue Continental. The SEC filed for an injunction to stop this practice, alleging that issuing the notes constituted selling investment paper. Continental claimed that issuing the notes did not constitute a "sale" because it did not receive any value from the recipients.

Full case and case summary also available online at: http://www.mlmlegal.com/legal-cases/SEC_v_ContinentalCommodities.php