Section 2

Citation: Section 2
Parent Document: United Housing Foundation, Inc. v. Forman, 421 U.S. 837 (1975)
Jurisdiction: United States (federal)
Effective Date: 1975-10-06
Original Source: https://www.courtlistener.com/opinion/109272/united-housing-foundation-inc-v-forman/ ↗

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Moreover, both statutes define the term “security” to include “stock.” Therefore, coverage under the statutes is clear under the Court’s holding in Joiner that “[i] instruments may be included within any of these definitions, as matter of law if on their face they answer to the name or description.” 320 U. S., at 351; see Tcherepnin, 389 U. S., at 339. “Security” was broadly defined with the explicit object of including “the many types of instruments that in our commercial world fall within the ordinary concept of a security,” H. It. Rep. No. 85, 73d Cong., 1st Sess., 11 (1933). Stock is therefore included because instruments “such as notes, bonds, and stocks, are pretty much standardized and the name alone carries well-settled meaning.” Joiner, 320 U. S., at 351. Even if this principle nevertheless allows room for exception of some instruments labeled “stock,” the Court’s justification for excepting the stock involved in this case is singularly unpersuasive. The Court states that “[c]ommon sense suggests that people who intend to acquire only a residential apartment in a state-subsidized cooperative, for their personal use, are not likely to believe that in reality they are purchasing investment securities simply because the transaction is *866evidenced by something called a share of stock.” Ante, at 851. But even informed commentators have expressed misgivings about this question.4 Thus the Court’s justification departs unacceptably from the principle of Joiner that “[i]n the enforcement of an act such as this it is not inappropriate that promoters’ offerings be judged as being what they were represented to be.” 320 U. S., at 353.

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