Investment contract - Howey test - unconstitutionally vague

Blog post about crypto-asset litigation in Boston, Massachusetts and beyond.

Disgorgement after SEC v. Govil

Atlas Trading case stayed pending decision in Kousisis v. United States.

Roaring Kitty meme stock investor alleged to have committed securities fraud by suit filed in Federal Court in Brooklyn.

Title 18 Section 1348 “Materiality” Standard as compared with Title 15 securities fraud cases.

The 9th Circuit last week released its opinion in United States v. Milheiser, 16-CR-00076, in which the Court overturned six convictions of defendants who had been convicted of mail fraud and conspiracy to commit mail fraud arising from the defendants’ sales companies’ aggressive tactics in selling printer toner. The 9th Circuit adopted the “benefit of the bargain” theory of wire fraud, under which individuals cannot be convicted of wire fraud if the alleged victims received the “benefit of the bargain,” even if they were induced to make a purchase through misrepresentations.

Prosecutors frequently argue that 18 USC 1348 (Title 18 securities fraud) has a lower materiality standard than Title 15 securities fraud (10b-5). This blog post argues that there is little reason for courts to impose a lower materiality standard for the same conduct.

Dynamis attorney Eric Rosen defeated the DOJ in a motion to dismiss the Indictment in the “Atlas Trading” case

Dynamis attorneys secured the dismissal of the Indictment in the "Atlas Trading" securities fraud case in the Southern District of Texas. Dynamis attorneys drafted the briefs and led the fight to obtain dismissal of the Indictment.

For years, courts viewed the “Howey” test as clear guidance as to whether a particular asset or investment was a security. Now, recent inconsistent decisions, particularly in the crypto space, have questioned that clear guidance. The effect is a rekindling the debate as to whether the term “investment contract” is void for vagueness because it fails to give people and businesses a reasonable answer as to what is or is not a security.

For years, courts viewed the “Howey” test as clear guidance as to whether a particular asset or investment was a security. Now, recent inconsistent decisions, particularly in the crypto space, have questioned that clear guidance. The effect is a rekindling the debate as to whether the term “investment contract” is void for vagueness because it fails to give people and businesses a reasonable answer as to what is or is not a security.

Tired of hearing about Ripple and Coinbase’s battles with the SEC? Here are five opinions from courts around the country that will shape crypto laws going forward.