¹SEC v. Howey was a Supreme Court case in 1946 that established the Howey Test for determining whether a transaction qualifies as a security under the Securities Act of 1933. The case involved Howey Company selling and leasing back citrus groves to buyers who expected profits from the company's efforts. The SEC sued Howey for not registering the transactions as securities. The Supreme Court ruled in favor of the SEC and defined a security as a contract, transaction, or scheme that involves a monetary investment, an expected profit, a common enterprise, and a reliance on a third party or promoter. The Howey Test has been applied to various financial transactions, including cryptocurrencies.
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