One legal question that has renewed interest over the past few years is “what is a security?” Crypto lovers will tell you that their stuff is not securities. It all goes back to the definition of “security” and the less conventional term within that definition of “investment contract.” The Howey test focuses on that term within the definition.
The case against Anchor State Capital (formerly known as Anchor State Investments) and Anchor State Properties caught my attention as an alleged Ponzi scheme in Massachusetts. The promoter, Christopher Aubin is accused of taking investor money and not actually investing all of it. It seems like run of the mill fraud. Obviously, Mr. Aubin has not had an opportunity to defend himself against the accusations.
Was he selling securities? The SEC complaint states that the investments involved slightly different forms called “Investment Contracts,” “Partner Contracts,” or “Real Estate Partner Contracts.” I’m going to guess that at least one of those forms is going to be considered a security.
Sources:
- SEC Charges Massachusetts Resident and his Companies with Stealing Investors’ Money
- SEC Complaint against Christopher Aubin; Anchor State Capital LLC, f/k/a Anchor State Investments LLC; Anchor State Properties LLC
- Feds accuse man in alleged investment scheme to pay for luxury lifestyle
- 7 Investigates: ‘That was everything I had’- Investors left empty handed after alleged fraud scheme
- RI Marine Accused of Running Ponzi Scheme Has Created Two New Companies