Sequel to the definition of investment company: a Riddle Wrapped in a Mystery within an Enigma

The definition of investment company, and the status questions the definition has spawned, has created a sub-literature for Investment Company Act lawyers that is daunting. In the authors' view, the Court's opinion may well be the most important analysis of the definition of investment com...

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Bibliographic Details
Published inThe Investment Lawyer Vol. 14; no. 7; p. 1
Main Authors Lybecker, Ma, Chambers, Matthew A
Format Journal Article Trade Publication Article
LanguageEnglish
Published Englewood Cliffs Aspen Publishers, Inc 01.07.2007
Subjects
Accounting
Annual reports
Balance sheets
Design
District courts
Federal court decisions
Federal legislation
Home appliances industry
Injunctions
Investment companies
Investments
Net income
Operating companies
State court decisions
United States
United States > US
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Summary:The definition of investment company, and the status questions the definition has spawned, has created a sub-literature for Investment Company Act lawyers that is daunting. In the authors' view, the Court's opinion may well be the most important analysis of the definition of investment company in the history of the Investment Company Act. National Presto is enormously important to understanding the possible applicability of the Investment Company Act to a broad range of issuers. As to a Section 3(b)(1) analysis, the Court confirms that a careful evaluation of all five factors from Tonopah Mining Co is warranted, rejecting the mechanical approach advanced by the SEC in the litigation, and that in the final analysis what principally matters is the beliefs the company is likely to induce in investors. In addition, National Presto strongly suggests that the value of non-balance sheet assets such as internally-developed intellectual property must be taken into account in applying the 40 Percent Test.
ISSN:1075-4512