The Securities and Exchange Commission regulates securities. In order to sell securities to the public, you must either register your offering with the SEC or comply with a checklist of requirements for exempt offerings. Either way, developing an asset deemed a security means that developers must hire securities lawyers at costs that can make a new project no longer worthwhile.
But what is a security? Most readers would be surprised by the broad range of business relationships that count as securities under a nearly hundred year-old test used by the SEC. That test is referenced in a case commonly cited as Howey and was based on state law tests used prior to the Securities Act of 1933. That's right, a test from before widespread adoption of automobiles is still the SEC's primary tool to regulate 21st century markets.
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