Appeal Vindicates SEC Over Definition Of Securities

Law360, New York (April 5, 2007, 12:00 AM EDT) -- In a victory for the U.S. Securities and Exchange Commission, a federal appeals court has reversed a lower court ruling that snubbed the agency’s definition of securities and derailed its fraud suit against a purchaser of credit card debt.

In a decision issued Wednesday, the U.S. Court of Appeals for the Eleventh Circuit said the federal court for the Northern District of Georgia had erred in ruling that investment contracts in a small Tennessee company were beyond the SEC’s reach.

The SEC sued Merchant Capital LLC...
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