This particular Supreme Court case established just what a security was.
It started when a guy began selling real estate that his established orange grove just happened to be planted in. It was kinda implied that people got profit from these oranges. However, the dude's company managed all of the trees itself, and, if buyers didn't use the company's management services, the buyers couldn't realistically make any money off of their investment.
As a result, the court ruled that the acreage investment was a kind of security contract, and as such, came under different (higher) scrutiny than if the buyer had just bought non-productive-land. When money flows to buy a Thing, it's a security.
Talk about makin' lemonade out of…oranges.
Related or Semi-related Video
Finance: What is the Maloney Act?2 Views
Finance allah shmoop what is the maloney act Well you
start with a piece of bread and some people like
to put mustard or mayo on it first And then
there's a few slices of cheese and weighed different act
The maloney act was one of the many financial regulatory
Acts that came between 19:30 Three and nineteen forty this
one being enacted in nineteen thirty eight and covering the
regulation of the otc or over the counter market That's
otc meaning essentially small often barely known company securities Penny
stocks you know trades that happened privately or almost privately
kind of ah private social trading network albeit fifty years
before wired computers for mass consumers Or really a thing
But there was a lot more to the maloney act
and just a small stock exchange for companies living in
loserville The bigger leap of faith brought about by this
act was that it created a kind of hybrid private
public partnership in policing financial dealings It tried to create
a kind of ethical standard and then to figure out
how to get people in the financial industry toe actually
adhere to it And this was the big idea because
it was an open kind of almost admission by the
government that the government really couldn't or wouldn't or just
didn't know how to police You know them sharpie college
educated wall streeters who always seemed to be one hundred
eighty points higher than the g men who were following
them around in the gray suit So today the most
meaningful element that remains of the maloney act is fin
rot That's the financial industry regulatory authority and it basically
has the authority to get all up in the faces
of brokers dealers and anyone else deemed a knowledgeable insider
in the financial world if they behave poorly venera administers
exams and while generally has a kind of big brother
meets fraternity and now sorority kind of vibe such that
everyone is placed on a level playing field when doing
business with everyone from mon pa kettle Teo yoda Yeah
level playing field level you know is a level is
a slice of bologna who
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