![]() Forman dealt with a New York City co-op. To obtain an apartment, one had to purchase “stock”, but the stock itself had none of the features of traditional stock and mainly was used as a security payment for the purchase of an apartment in the co-op. The residents sued, claiming they had been sold stock, and the Supreme Court held that it was not stock, and was not even a security according to the Howey test. ![]() In 1975, the Supreme Court decided United Housing Foundation, Inc. In the case of Howey, the contract was deemed a security because the purchasers received the profit through the efforts of others.
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