Glossary of Key Terms

• Investment Contract: A contract, transaction, or scheme where a person invests money in a common enterprise with the expectation of making a profit primarily from the efforts of others.
• Howey Test: A legal test established in SEC v. W.J. Howey Co. (1946) used to determine if a transaction qualifies as an "investment contract" and thus is a security under federal law.
• Securities Act of 1933: A U.S. federal law that requires the registration of securities with the Securities and Exchange Commission (SEC) and aims to ensure transparency and protect investors from fraud.
• Common Enterprise: An investment scheme in which investors pool their money and share in the profits and risks of an operation. The fortunes of investors are linked to the success or failure of the enterprise.
• Efforts of Others: The performance of key managerial and operational activities by someone other than the investor which significantly affect the investor's potential for profit.
• SEC (Securities and Exchange Commission): The U.S. government agency responsible for enforcing the federal securities laws and regulating the securities industry.
• Regulatory Purview: The scope of a government agency's authority or responsibility in overseeing and regulating certain areas of activity or industries.

Need Classes?

Legal English innovation has several classes weekly, focusing on commercial law and other areas to help you communicate better with your clients.

+57 320-315-4781

Follow us on Instagram!

Friends on Facebook?

Like us on Linked In?