SEC Argues That Sales Of Hotel Rooms Are Sales of A Security

In June, I wrote this post about U.S. District Court Judge Dana Sabraw’s opinion in Salameh v. Tarsadia Hotels, 2011 U.S. Dist. LEXIS 30375. The case involved the question of whether ownership interests in individual units of the Hard Rock Hotel San Diego constitute securities under either the investment contract test enunciated by the U.S. Supreme Court in S.E.C. v. Howey, 328 U.S. 293 (1946)) or the “risk capital” test described by the California Supreme Court in Silver Hills Country Club v. Sobieski, 55 Cal.2d 811 (1961).

Time and this case have crept on and now Judge Sabraw’s ruling is before the Ninth Circuit Court of Appeals. Recently, the Securities and Exchange Commission has weighed in with this amicus brief. Just like Captain Renault when he found gambling in Rick’s Cafe Americain, readers will be shocked to learn that the SEC takes the position that the an investment contract is implicated in this case.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Published In: General Business Updates, Finance & Banking Updates, Commercial Real Estate Updates, Securities Updates

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.

© Allen Matkins Leck Gamble Mallory & Natsis LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »