In a landmark 1946 U.S. Supreme Court decision, SEC v. W.J. Howey Co., the Court held that a transaction is an investment contract, or security, if “a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party.”
The SEC was able to build the HoweyCoins website in-house in very little time, which demonstrates just how easy it is for someone to create a scam opportunity.
Remember, a free and simple way to protect your money is to research investments and the people who sell them. You can do all that and more on the SEC’s investor education website, Investor.gov.
Before you invest, Investor.gov.
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[1]For example, SEC Chairman Jay Clayton’s Statement on Cryptocurrencies and Initial Coin Offerings includes questions investors and other market participants should consider asking. https://www.sec.gov/