EarnByLoaning - earnbyloaning.com

[jlpicard]

Originally Posted by Jungle Hunter

The criteria for whether a note represents a security is that established under Reves v. Ernst & Young. Search and you'll find it easily.

The following is an excerpt addressing the question of what constitutes a note versus a security with my emphasis added to highlight key elements:

"An examination of the list itself makes clear what those standards should be. In creating its list, the Second Circuit was applying the same factors that this Court has held apply in deciding whether a transaction involves a "security."

First, we examine the transaction to assess the motivations that would prompt a reasonable seller and buyer to enter into it. If the seller's purpose is to raise money for the general use of a business enterprise or to finance substantial investments and the buyer is interested primarily in the profit the note is expected to generate, the instrument is likely to be a "security." If the note is exchanged to facilitate the purchase and sale of a minor asset or consumer good, to correct for the seller's cash-flow difficulties, or to advance some other commercial or consumer purpose, on the other hand, the note is less sensibly described as a "security." See, e. g., Forman, 421 U.S., at 851 (share of "stock" carrying a right to subsidized housing not a security because "the inducement to purchase was solely to acquire subsidized low-cost living space; it was not to invest for profit").

Second, we examine the "plan of distribution" of the instrument, SEC v. C. M. Joiner Leasing Corp., 320 U.S. 344, 353 (1943), to determine whether it is an instrument in which there is "common trading for speculation or investment," id., at 351.

Third, we examine the reasonable expectations of the investing public: The Court will consider instruments to be "securities" on the basis of such public expectations, even where an economic analysis of the circumstances of the particular transaction might suggest that the instruments are not "securities" as used in that transaction. Compare Landreth Timber, 471 U.S., at 687, 693 (relying on public expectations in holding that common stock is always a security), with id., at 697-700 (STEVENS, J., dissenting) (arguing that sale of business to single informed purchaser through stock is not within the purview of the Acts under the economic reality test). See also Forman, supra, at 851.

Finally, we examine whether some factor such as the existence of another regulatory scheme significantly reduces the risk of the instrument, thereby rendering application of the Securities Acts unnecessary. See, e. g., Marine Bank, 455 U.S., at 557-559, and n. 7.

We conclude, then, that in determining whether an instrument denominated a "note" is a "security," courts are to apply the version of the "family resemblance" test that we have articulated here: A note is presumed to be a "security," and that presumption may be rebutted only by a showing that the note bears a strong resemblance (in terms of the four factors we have identified) to one of the enumerated categories of instrument. If an instrument is not sufficiently similar to an item on the list, the decision whether another category should be added is to be made by examining the same factors."


Under these criteria, EBL's "loans" would appear to be considered as "securities" by the court's measure.

- They are sold by EBL to generate money for its own business purposes and purchased by buyers as a means to generate a return on a passive basis (i.e., they are not making a purchase, it's not a consumer loan, etc.).

- They are offered to the public for common investment ("just having a web site" as you say satisfies this).

- Expectations of the investing public are arguable as far as being known absolutely I suppose, but viewed objectively it would seem that a public view of this would be as an investment opportunity (versus, for example, an ad for a business seeking a single loan from a single private party). The simple presense of the program in this HYIP forum and the substance of the discussion by investors and potential investors stands as evidence of this view.

- The final test relates to whether some other regulation is present that supercedes or otherwise makes regulation under securities law redundant and thus unneccesary. As EBL appears to claim that by their nature these transactions are not subject to regulation, then given their own representation it would appear that no other regulation exists and therefore securities acts would apply assuming that the other criteria are met.

For those interested, this case is at:

http://caselaw.lp.findlaw.com/script...l=494&invol=56

[smallface]

Originally Posted by jlpicard

For those interested, this case is at:

http://caselaw.lp.findlaw.com/script...=507&invol=170

I am only interested in getting my money back from EBL scam

[hpagan]

I can't figure out why all of you are MENTALLY MASTERBATING over this!

It's the same $**t over and over. SEC BLAH! BLAH! BLAH!

Who cares if EBL is a PONZI! I'm sure it will take months if not years for the SEC to get involve anyway.

if you've gotten paid great! and if you've not! Well, you're the fool like (SMALLFACE) that got beat.

We are all here for one reason, to have an opportunity to make money plain and simple. It's a risk and/or gamble but you make the final decision for yourself nobody is forcing you.

I haven't seen anywhere that JLPICARD has forced any one to join EBL.

[Jungle Hunter]

Originally Posted by jlpicard

For those interested, this case is at:

http://caselaw.lp.findlaw.com/script...l=494&invol=56

That's a different case by the same name but a later date and addressing other matters. Sorry, I should have been more specific with the reference. It's Reves v. Ernst & Young, 494 U.S. 56 (1990).

Link is here: http://supreme.justia.com/us/494/56/case.html

[jlpicard]

U.S. Supreme Court
REVES v. ERNST & YOUNG, 494 U.S. 56 (1990)
494 U.S. 56

REVES ET AL. v. ERNST & YOUNG
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT

No. 88-1480.

Argued November 27, 1989
Decided February 21, 1990

In order to raise money to support its general business operations, the Farmers Cooperative of Arkansas and Oklahoma (Co-Op) sold uncollateralized and uninsured promissory notes payable on demand by the holder. Offered to both Co-Op members and nonmembers and marketed as an "Investment Program," the notes paid a variable interest rate higher than that of local financial institutions. After the Co-Op filed for bankruptcy, petitioners, holders of the notes, filed suit in the District Court against the Co-Op's auditor, respondent's predecessor, alleging, inter alia, that it had violated the antifraud provisions of the Securities Exchange Act of 1934 - which regulates certain specified instruments, including "any note[s]" - and Arkansas' securities laws by intentionally failing to follow generally accepted accounting principles that would have made the Co-Op's insolvency apparent to potential note purchasers. Petitioners prevailed at trial, but the Court of Appeals reversed. Applying the test created in SEC v. W. J. Howey Co., 328 U.S. 293 , to determine whether an instrument is an "investment contract" to the determination whether the Co-Op's instruments were "notes," the court held that the notes were not securities under the 1934 Act or Arkansas law, and that the statutes' antifraud provisions therefore did not apply.

@ Jungle Hunter - According to what I'm reading, the court did not reach the same conclusion that you did...

Again, here is the link where I got the above quote:

http://caselaw.lp.findlaw.com/script...l=494&invol=56
.

[jlpicard]

Originally Posted by Jungle Hunter

That's a different case by the same name but a later date and addressing other matters. Sorry, I should have been more specific with the reference. It's Reves v. Ernst & Young, 494 U.S. 56 (1990).

Link is here: http://supreme.justia.com/us/494/56/case.html

It's the exact same case... Just two different locations... Look closely.
.

[Jungle Hunter]

Originally Posted by jlpicard

@ Jungle Hunter - According to what I'm reading, the court did not reach the same conclusion that you did...

Again, here is the link where I got the above quote:

http://caselaw.lp.findlaw.com/script...l=494&invol=56
.

That's background stating the result in the earlier finding of the Appeals Court that was the subject of the decision here. Read down more...

"We granted certiorari [agreed to review the case] to address the federal issue, 490 U.S. 1105 (1989), and now reverse the judgment of the Court of Appeals."

and more specifically below...

"For the foregoing reasons, we conclude that the demand notes at issue here fall under the "note" category of instruments that are "securities" under the 1933 and 1934 Acts. We also conclude that, even under respondent's preferred approach to 3(a)(10)'s exclusion for short-term notes, these demand notes do not fall within the exclusion. Accordingly, we reverse the judgment of the Court of Appeals and remand the case for further proceedings consistent with this opinion.

So ordered. "


In any case, the decision in this particular case isn't as significant as the general criteria that were established and serve as a basis for broader future application in similar cases.

.

[Jungle Hunter]

Originally Posted by jlpicard

It's the exact same case... Just two different locations... Look closely.
.

Yep, looking again your original link was right. I clicked on the quoted link in smallface's post thinking that it was the same (since quoted) but for some reason links to a different case (REVES v. ERNST & YOUNG, 507 U.S. 170 (1993). No idea why.

[SurfersGold]

Originally Posted by smallface

I am only interested in getting my money back from EBL scam

Smallface,
i have heard you repeatedly say you want your money back from EBL. I have seen picard and others offer to help you recitfy any discrepencies or lost funds.
I am the program admin.
Give me your username so I can help you, otherwise everyone here will truly know you are as they say.
Put up or shut up Smallface.

[HYIPRegulator]

Originally Posted by SurfersGold

Smallface,
i have heard you repeatedly say you want your money back from EBL. I have seen picard and others offer to help you recitfy any discrepencies or lost funds.
I am the program admin.
Give me your username so I can help you, otherwise everyone here will truly know you are as they say.
Put up or shut up Smallface.

Methinks Smallface is a small person seeking attention