Quimbee logo with url
From our private database of 14,500+ case briefs...

Securities and Exchange Commission v. Koscot Interplanetary, Inc.

United States Court of Appeals for the Fifth Circuit
497 F.2d 473 (1974)

Facts

Koscot Interplanetary, Inc. (defendant) operates a scheme in which individuals may pay a certain amount of money in order to have the right to sell cosmetic products at a discount. The greater the amount paid to Koscot, the greater the discount. The individuals are recruited by those investing in Koscot at Opportunity Meetings. The investors read directly from a script provided by Koscot. The Securities and Exchange Commission (plaintiff) brought suit against Koscot, alleging that this scheme constitutes a security, and thus must comply with securities regulations. The district court ruled in favor of Koscot, stating that the third prong of the Howey test, profits originating from others, was not satisfied in this instance because the investors were involved in the recruitment of employees. The SEC appealed to the Fifth Circuit Court of Appeals.

Rule of Law

Issue

Holding and Reasoning (Gewin, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.

  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.

Here's why 265,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 14,500 briefs, keyed to 196 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Here's why 265,000 law students have relied on our case briefs:

  • Reliable - written by law professors and practitioners not other law students.
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your class - works on your mobile and tablet.
  • 14,500 briefs - keyed to 196 casebooks.
  • Uniform format for every case brief.
  • Written in plain English - not in legalese and not just repeating the court's language.
  • Massive library of related video lessons - and practice questions.
  • Top-notch customer support.