Posted By:
Jon CanfieldFirst I wnt to state that I actually support the idea of cardtarget. Although not directed to my personal tastes, I still applaud the idea and can defenately see a potential market for others to enjoy.
That being said, I have to echo Adam's post and my original post about what a security is... I think it's important to keep in mind that the SEC is out there to protect the little guy - it's what they do - they can almost deem anything they want to be a security. Even though section 2 of the 1933 Act has a laundry list of what constitutes a security, the SEC has been able to go well beyond that. As I mentioned earlier, fractional ownership of orange trees in Howey were deemed a security [ this is the cornerstone case of what is a security]. That case alone seems very similar to this - people purchased ownership interests but they weren't able to actually go an pick their trees, or walk on the property (similar to an ownership interest in a card in which you can't take it home for a night, or even hold it whenever you want to). Furthermore, in the Silver Hills Country Club case - a country club was found to be a security. Tiered partnerships have been found to be securities, and Viatical settlements damn near became a security - and the SEC may decide to fight the issue more; and a saw mill has been found to be a security. I guess my point is - a security goes well beyond the definition of what a "normal" security is - any good securities lawyer will tell you that. If you satisfy the 4 part test of Howey, then the SEC can force regulation (not to mention state laws that may be applicable even if federal laws are not).