Definition of "Security"

What this video covers

• Why the Uniform Securities Act (USA) definition of "security" is deliberately broader than stocks and bonds, and why the catch-all provision kills every labeling trick on the exam
• How the substance-over-form doctrine works: regulators and courts examine economic reality, never the promoter-supplied name
• What the four Howey test prongs are and why all four must be satisfied: investment of money, common enterprise, expectation of profits, and derived primarily from the efforts of others
• Why prong four (efforts of others) is the most commonly tested trap, and how active investor management instantly destroys investment contract status
• How modern courts relaxed the original "solely from the efforts of others" standard to "primarily" or "substantially," and why minimal investor effort still leaves prong four intact
• What happens to the Howey test when there is no investment of money (free assets) or no expectation of profits (personal consumption), and why either failure makes it not a security
• Why a promissory note is presumed to be a security under the USA, and which three fact patterns rebut that presumption (personal loans, short-term consumer notes, home mortgage notes)