Thursday, November 7, 2013

Lowe v. SEC case brief

Lowe v. SEC case brief summary
472 U.S. 181 (1985)

CASE SYNOPSIS
Petitioners, former investment advisors, whose registration was revoked by the United States Securities and Exchange Commission, sought review of an injunction from the United States Court of Appeals for the Second Circuit, contending that they should not be permanently enjoined, pursuant to § 203 of the Investment Advisors Act of 1940, 15 U.S.C.S. § 80b-3(c), from publishing non-personalized investment advice in newsletters.

CASE FACTS
Petitioners former investment advisers, whose registration was revoked by the United States Securities and Exchange Commission due to the use of fraudulent business practices, sought review of a permanent injunction. Petitioners contended that they should not be permanently enjoined from publishing non-personalized investment advice and commentary in securities newsletters although they were not registered as investment advisers pursuant to § 203 of the Investment Advisors Act of 1940 (Act), 15 U.S.C.S. § 80b-3(c). On appeal, the injunction was reversed.

DISCUSSION
  • The Supreme Court held that petitioners' publications did not fit within the central purpose of the Act as they did not offer individualized advice attuned to any specific portfolio or to any client's particular needs. 
  • Further, petitioners' publications were deemed by the Court to have fallen within the exception to § 203 as such publications were bona fide, did not contain false or misleading information, and were of general and regular circulation.

CONCLUSION
The injunction was reversed, as petitioners' publications were deemed by the Court to have fallen within the statutory exception because such publications were bona fide, did not contain false or misleading information, and were of general and regular circulation.


Suggested Study Aids For Securities Regulation Law
Securities Regulation in a Nutshell, 10th (Nutshell Series)
Securities Regulation: Examples & Explanations, 5th Edition
Securities Regulations: The Essentials

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