Definition of "Security"

What this video covers

• Why the statutory definition of "security" is intentionally broad, and how the catch-all phrase "any interest or instrument commonly known as a security" prevents promoters from evading regulation through creative labeling
• How the substance over form doctrine works: courts and regulators examine economic reality, not the name attached to an instrument
• The four Howey Test prongs: investment of money (or other valuable consideration), common enterprise, expectation of profits, and profits derived from efforts of others
• Why the word "solely" is a trap on the fourth prong, and how courts have relaxed this to "primarily" or "substantially" from the efforts of others
• Horizontal versus vertical commonality as two alternative ways to satisfy the common enterprise prong
• Why a note is presumed to be a security, and the specific exceptions that rebut that presumption (consumer loans, home mortgages, short-term commercial notes secured by receivables)
• How to apply the all-or-nothing rule: missing even one Howey prong means an arrangement is definitively not an investment contract