In re Tucker Corp.
Securities and Exchange Commission
26 SEC 249 (1947)
- Written by Steven Pacht, JD
Facts
In August 1946, Tucker Corporation (defendant) began selling automobile franchises to dealers and distributors pursuant to agreements requiring franchisees to pay a deposit of $25 per car, which Tucker promised to repay at a future date. In May 1947, Tucker filed a registration statement for a proposed public offering of common stock. In June, the Securities and Exchange Commission (SEC) (plaintiff) initiated stop-order proceedings with respect to the proposed stock offering on the basis that the franchise agreements were securities because they called for Tucker to repay the deposits. Per the SEC, Tucker thus violated § 5(c) of the Securities Act of 1933 by selling the franchise agreements without an effective registration statement. Tucker subsequently resolved the SEC’s concerns, and the SEC decided to dismiss the stop-order proceedings. Nevertheless, the SEC issued a comment about Tucker’s franchise agreements.
Rule of Law
Issue
Holding and Reasoning ()
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