SEC v. Howey provides the major definition for determining what investments will be deemed to be securities subject to securities law.
a. True
b. False
Indicate whether the statement is true or false
Question 2
Rights of the Guarantor. On October 1, 1985, Wallace and Helen Brunson contracted with Bear Park, Inc, to sell certain real estate in Taney County, Missouri, for 366,200. At the closing, Bear Park gave the Brunsons a promissory note for 285,000 in partial payment. Several of Bear Park's shareholders and directors, including Ronald Todd, signed a guaranty agreement on the back of the note. According to the terms of the note, Bear Park was to make quarterly payments of principal and interest, with the first payment of 68,800 due on January 7, 1986. The remaining quarterly payments, beginning April 7, 1986, would each be 7,226.80. When Bear Park failed to make the first payment, the Brunsons agreed to accept 7,000 in lieu of the full 68,800 and to increase the amount of the subsequent payments to cover the difference. Todd and the others knew nothing about the new terms. When Bear Park failed to make the next payment, the Brunsons declared the note in default and eventually demanded that the guarantors pay the amount due. No payments were made. The Brunsons assigned their interest in the note to Jake Kirkland, who foreclosed on the property. After the foreclosure sale, there was a deficiency of 36,454.84, plus interest, expenses, and attorneys' fees. Kirkland sued Todd and the others for this amount. Discuss the liability of Todd and the others in this situation.