Over the multiple decades (too many to count) that I have taught Securities Regulation, the most stable, unchanging part of the course was the chapter on “What Is a Security.” All law professors teach SEC v. Howey, 328 U.S. 293 (1946) and its three-part test: Was there (1) an investment of money or property (2) in a common enterprise (3) with an expectation of profits predominantly from the efforts of a promoter or other third party?

To be sure, there were a few other issues: horizontal versus vertical commonality, debt versus equity (Reves v. Ernst & Young, 494 U.S. 56 (1990)), and unique investments sold to a single person and not designed for trading (Marine Bank v. Weaver, 4555 U.S. 551 (1982)), but basically this was the easiest part of the course to teach.

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