LSI 2010 Real Estate Joint Ventures conference materials.pdf

Erin Joyce Letey of Riddell Williams P.S. Speaker 22: 4
“Investment Contract”
Serves as a catch-all to embrace all arrangements that look
like a security
Four elements of an “investment contract”:
An investment of money
In a common enterprise
With an expectation of profits
Solely from the efforts of others
E.g. investment in real estate coupled with management
agreement
Form disregarded for substance, and emphasis is placed on
economic reality
SEC v. W. J. Howey Co., 328 U.S. 293 (1946)
Riddell Williams P.S. 7
Basics of Securities Regulation
Securities laws regulate both the
offer and sale of a security
Every offer and sale of securities
must either be registered or
exempt from registration
Other areas of regulation:
registration or exemption of every
broker-dealer, securities
salesperson, investment adviser
or investment adviser
representative
Prohibition on fraudulent conduct,
i.e., misrepresentations or failure
to disclose material information
Riddell Williams P.S. 8
Law Seminars International | Real Estate Joint Ventures and Funds | 02/09/10 in Seattle, WA