CASE 21.2 SEC v. Edwards (2004) involved sales of interests in pay telephones with a question before the U.S. Supreme Court of whether a moneymaking scheme falls outside the definition of an investment contract because the promised rate of return is fixed, rather than variable. How did the Court rule?
a. The Court held that a promise of a fixed rate of return did not prevent the arrangement from being an investment contract.
b. The Court held that a promise of a fixed rate of return prevented the arrangement from being an investment contract.
c. The Court held that a promise of a fixed rate of return did not prevent the arrangement from being an investment contract, but only because the underlying company went into bankruptcy.
d. The Court held that a promise of a fixed rate of return prevented the arrangement from being an investment contract, but only because the underlying company went into bankruptcy.
a
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