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> I cannot imagine how they don’t see the SEC’s reasoning about Lend wrt Howey. If you want to argue that Howey does not apply or fight the decision/lawsuit, t

by OldHand2018 5y ago

> I cannot imagine how they don’t see the SEC’s reasoning about Lend wrt Howey. If you want to argue that Howey does not apply or fight the decision/lawsuit, then fine. But feigning ignorance of something a (non-legal expert) programmer can connect the dots of instantly just makes me feel like they’re playing a PR game. Grewal was a federal (magistrate) judge in SF before he quit to go work at Facebook. Everyone I know that has appeared before him has thought that he was very good. I'd like to give him the benefit of the doubt - his entire legal career has been patents. Perhaps he truly doesn't see how this applies. But you are right, this just seems... off. EDIT - I've read this a few times, and despite where it says that this is not an investment or note, it sure sounds similar to the unsecured demand notes that some car companies use for their captive finance operations (in day-to-day operations, they are virtually indistinguishable from an interest-bearing checking account). And those are most definitely SEC-registered securities. See: https://www.rightnotes.com https://www.rightnotes.com https://www.wsj.com/articles/car-maker-notes-attract-investors-seeking-short-term-yield-11605781801 https://www.wsj.com/articles/car-maker-notes-attract-investo... https://www.ford.com/finance/investor-center/ford-interest-advantage https://www.ford.com/finance/investor-center/ford-interest-a...

dataflow 5y ago
> his entire legal career has been patents I'm confused, is patent experience particularly relevant to this case about securities law?
- OldHand2018 5y ago
  No, that's why I'd like to assume that when he says he doesn't know why the SEC has a problem with their plan, he is telling the truth and this isn't just a PR attempt.
  - josefx 5y ago
    Except he says they got a wells notice, first hit for that on google: > A "Wells Notice" is a letter sent by a securities regulator to a prospective respondent, notifying him of the substance of charges that the regulator intends to bring against the respondent, and affording the respondent with the opportunity to submit a written statement to the ultimate decision maker. So did they receive a notice with the charges or didn't they?
    - throwaway2037 5y ago
      Good question. I needed to remind myself of the nuance. First sentence from Wiki says: <<A Wells notice is a letter that the U.S. Securities and Exchange Commission (SEC) sends to people or firms when it is planning to bring an enforcement action against them.>> To me: "planning" is the key term. Ref: https://en.wikipedia.org/wiki/Wells_notice https://en.wikipedia.org/wiki/Wells_notice The Wiki article is short and dense. I highly recommend it!
staticman2 5y ago
You misunderstand the legal field if you think a lawyer should be given the benefit of the doubt when arguing on behlf of a client. Their job is to use the most persuasive propaganda they can get away with.
- darawk 5y ago
  In this context, his job is to assess the legality of it before they create the product. Companies don't generally want to invest in building something they aren't legally allowed to market.
  - dragonwriter 5y ago
    > In this context, his job is to assess the legality of it before they create the product. No, in this cass (that is, the case of the article under discussion) his job is to act as a PR representative of the company in the course of action it has chosen which is leading to imminent legal conflict with the SEC. It’s true that he also had the job you discuss, but this article isn't the output of that job; that would be found in confidential internal advisory memos to the board and other executives.
  - koolba 5y ago
    You’re mixing up what would be asked to the in house lawyers. It’s not a binary: Is this legal? It’s: Can we get away with this?
    - gitfan86 5y ago
      Sometimes people assume that lawyers write contracts with the goal of the contract never being breached. But plenty of times they write contracts with the goal of breaching it being of little significance for their client.
  - TomSwirly 5y ago
    For a counterexample, look at Uber, Lyft, or AirBNB, whose whole business models have consisted of flouting the law and quickly adjusting when caught.

dataflow 5y ago

> his entire legal career has been patents I'm confused, is patent experience particularly relevant to this case about securities law?

OldHand2018 5y ago
No, that's why I'd like to assume that when he says he doesn't know why the SEC has a problem with their plan, he is telling the truth and this isn't just a PR attempt.
- josefx 5y ago
  Except he says they got a wells notice, first hit for that on google: > A "Wells Notice" is a letter sent by a securities regulator to a prospective respondent, notifying him of the substance of charges that the regulator intends to bring against the respondent, and affording the respondent with the opportunity to submit a written statement to the ultimate decision maker. So did they receive a notice with the charges or didn't they?
  - throwaway2037 5y ago
    Good question. I needed to remind myself of the nuance. First sentence from Wiki says: <<A Wells notice is a letter that the U.S. Securities and Exchange Commission (SEC) sends to people or firms when it is planning to bring an enforcement action against them.>> To me: "planning" is the key term. Ref: https://en.wikipedia.org/wiki/Wells_notice https://en.wikipedia.org/wiki/Wells_notice The Wiki article is short and dense. I highly recommend it!

staticman2 5y ago

You misunderstand the legal field if you think a lawyer should be given the benefit of the doubt when arguing on behlf of a client. Their job is to use the most persuasive propaganda they can get away with.

darawk 5y ago
In this context, his job is to assess the legality of it before they create the product. Companies don't generally want to invest in building something they aren't legally allowed to market.
- dragonwriter 5y ago
  > In this context, his job is to assess the legality of it before they create the product. No, in this cass (that is, the case of the article under discussion) his job is to act as a PR representative of the company in the course of action it has chosen which is leading to imminent legal conflict with the SEC. It’s true that he also had the job you discuss, but this article isn't the output of that job; that would be found in confidential internal advisory memos to the board and other executives.
- koolba 5y ago
  You’re mixing up what would be asked to the in house lawyers. It’s not a binary: Is this legal? It’s: Can we get away with this?
  - gitfan86 5y ago
    Sometimes people assume that lawyers write contracts with the goal of the contract never being breached. But plenty of times they write contracts with the goal of breaching it being of little significance for their client.
- TomSwirly 5y ago
  For a counterexample, look at Uber, Lyft, or AirBNB, whose whole business models have consisted of flouting the law and quickly adjusting when caught.