Howey test in Oregon

1990This court adopted a modified Howey test, which we state in the text below, in Pratt v. Kross, 276 Or 483, 497 , 555 P2d 765 (1976), to determine whether a transaction is an investment contract under the Oregon securities law.

1990This court adopted a modified Howey test, which we state in the text below, in Pratt v. Kross, 276 Or 483, 497 , 555 P2d 765 (1976), to determine whether a transaction is an investment contract under the Oregon securities law.

1989The only amendment to present ORS 59.015(16)(a) does not affect this issue. 6 Securities and Exchange Com. v. Howey Co., 328 US 293, 298-99 , 66 S Ct 1100 , 90 L Ed 1244 (1946). 7 In Pratt v. Kross, supra, the Supreme Court followed United Housing Foundation, Inc. v. Forman, 421 US 837, 852 , 95 S Ct 2051 , 44 L Ed 2d 621 (1975), in modifying the Howey test, using the analysis in SEC v. Glenn W.

1989The only amendment to present ORS 59.015(16)(a) does not affect this issue. 6 Securities and Exchange Com. v. Howey Co., 328 US 293, 298-99 , 66 S Ct 1100 , 90 L Ed 1244 (1946). 7 In Pratt v. Kross, supra, the Supreme Court followed United Housing Foundation, Inc. v. Forman, 421 US 837, 852 , 95 S Ct 2051 , 44 L Ed 2d 621 (1975), in modifying the Howey test, using the analysis in SEC v. Glenn W.

1990Both parties agree, however, that an “equity” interest encompasses, at a minimum, the right to share in the profits of the movie and excludes the right to a return of the $200,000 principal or interest on it. 7 SEC v. Howey Co., 328 US 293, 298-99 , 66 S Ct 1100 , 90 L Ed 1244 (1946), established what came to be called the Howey test to determine whether a transaction is an invéstment contract under federal securities law.

1990Both parties agree, however, that an “equity” interest encompasses, at a minimum, the right to share in the profits of the movie and excludes the right to a return of the $200,000 principal or interest on it. 7 SEC v. Howey Co., 328 US 293, 298-99 , 66 S Ct 1100 , 90 L Ed 1244 (1946), established what came to be called the Howey test to determine whether a transaction is an invéstment contract under federal securities law.

1989We addressed that issue in State v. Consumer Business System, 5 Or App 19, 25 , 482 P2d 549 (1971), adopting an alternative test for an investment contract, the “risk capital test,” precisely in order to avoid the limitations of the Howey test.

1989We addressed that issue in State v. Consumer Business System, 5 Or App 19, 25 , 482 P2d 549 (1971), adopting an alternative test for an investment contract, the “risk capital test,” precisely in order to avoid the limitations of the Howey test.

1993In Lavery v. Kearns, 792 F Supp 847 (D Me 1992), the court rejected the broad test that some circuits were applying for vertical commonality and adopted the narrower one, requiring that the fortunes of the plaintiffs and the promoters be intertwined. 792 F Supp at 853 .

1993In Lavery v. Kearns, 792 F Supp 847 (D Me 1992), the court rejected the broad test that some circuits were applying for vertical commonality and adopted the narrower one, requiring that the fortunes of the plaintiffs and the promoters be intertwined. 792 F Supp at 853 .

1989Turner Enterprises, Inc., 348 F Supp 766 (D Or 1972), aff’d 474 F2d 476 (9th Cir), cert denied 414 US 821 (1973).

1989Turner Enterprises, Inc., 348 F Supp 766 (D Or 1972), aff’d 474 F2d 476 (9th Cir), cert denied 414 US 821 (1973).

1989Turner Enterprises, Inc., 348 F Supp 766 (D Or 1972), aff’d 474 F2d 476 (9th Cir), cert denied 414 US 821 (1973).

1989Turner Enterprises, Inc., 348 F Supp 766 (D Or 1972), aff’d 474 F2d 476 (9th Cir), cert denied 414 US 821 (1973).

1989See n 7, supra. 10 ORS 166.720 provides: “(1) It is unlawful for any person who has knowingly received any proceeds derived, directly or indirectly, from a pattern of racketeering activity or through the collection of an unlawful debt to use or invest, whether directly or indirectly, any part of such proceeds, or the proceeds derived from the investment or use thereof, in the acquisition of any title to, or any right, interest or equity in, real property or in the establishment or operation of any enterprise. “(2) It is unlawful for any person, through a pattern of racketeering activity or thr

1989See n 7, supra. 10 ORS 166.720 provides: “(1) It is unlawful for any person who has knowingly received any proceeds derived, directly or indirectly, from a pattern of racketeering activity or through the collection of an unlawful debt to use or invest, whether directly or indirectly, any part of such proceeds, or the proceeds derived from the investment or use thereof, in the acquisition of any title to, or any right, interest or equity in, real property or in the establishment or operation of any enterprise. “(2) It is unlawful for any person, through a pattern of racketeering activity or thr

1989See n 7, supra. 10 ORS 166.720 provides: “(1) It is unlawful for any person who has knowingly received any proceeds derived, directly or indirectly, from a pattern of racketeering activity or through the collection of an unlawful debt to use or invest, whether directly or indirectly, any part of such proceeds, or the proceeds derived from the investment or use thereof, in the acquisition of any title to, or any right, interest or equity in, real property or in the establishment or operation of any enterprise. “(2) It is unlawful for any person, through a pattern of racketeering activity or thr

1976(Footnotes omitted.) Such a conclusion has also been arrived at by the 9th Circuit Court of Appeals in the case of McGreghar Land Co. v. Meguiar, 521 F.2d 822 (9th Cir.1975), wherein it held that by the Howey test the purchase of a limited partnership interest was a transfer of a security under the federal *772 act.

1976(Footnotes omitted.) Such a conclusion has also been arrived at by the 9th Circuit Court of Appeals in the case of McGreghar Land Co. v. Meguiar, 521 F.2d 822 (9th Cir.1975), wherein it held that by the Howey test the purchase of a limited partnership interest was a transfer of a security under the federal *772 act.

1976The most recent test for an investment contract is one adopted by the Supreme Court of Hawaii in the case of Commissioner v. Hawaii Market Center, Inc., 52 Hawaii 642 , 485 P2d 105 , 47 ALR3d 1366 (1971).

1976The most recent test for an investment contract is one adopted by the Supreme Court of Hawaii in the case of Commissioner v. Hawaii Market Center, Inc., 52 Hawaii 642 , 485 P2d 105 , 47 ALR3d 1366 (1971).

1971This latter aspect seems to us to be a separate business risk apart from the success or failure of the franchisee’s conduct of the franchised business * * *. [W]e believe that this accords with the intent of the parties: the incentive for franchise arrangements is to give the franchisee the status of an independent businessman apart from the franchisor. # * * j-jj-j. would seem that the franchised business operated by the franchisee and the franchisor’s business of supplying the franchisee with goods and services are separate ‘business ventures’ and that the venture in which the franchisee par

1971This latter aspect seems to us to be a separate business risk apart from the success or failure of the franchisee’s conduct of the franchised business * * *. [W]e believe that this accords with the intent of the parties: the incentive for franchise arrangements is to give the franchisee the status of an independent businessman apart from the franchisor. # * * j-jj-j. would seem that the franchised business operated by the franchisee and the franchisor’s business of supplying the franchisee with goods and services are separate ‘business ventures’ and that the venture in which the franchisee par