Practice question
The investment-contract test asks for an expectation of profits. Does that mean actual profits must already have been paid before the arrangement can qualify?
- No
- Yes, always at least ten annual payments
- Yes, but only if paid in dollars
- Yes, unless a paper certificate exists
- Yes, because loss-making schemes are categorically outside the test
Legal references
- RA8799 Securities Regulation Code: https://lawphil.net/statutes/repacts/ra2000/ra_8799_2000.html Sections3.1,9–10.
- Power Homes Unlimited v. SEC, GR164182, February26 2008 MAIN: https://lawphil.net/judjuris/juri2008/feb2008/gr_164182_2008.html MAIN flexible investment-contract test.
- SEC v. Prosperity.Com, GR164197, January25 2012 MAIN: https://lawphil.net/judjuris/juri2012/jan2012/gr_164197_2012.html MAIN test and role of persuasive foreign authorities.
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