Legal Environment of Business 8th Edition by Henry Cheeseman

Exercise 2

Definition of Security Dare To Be Great, Inc. (Dare), was a Florida corporation that was wholly owned by Glenn W. Turner Enterprises, Inc. Dare offered self-improvement courses aimed at improving self-motivation and sales ability. In return for an investment of money, the purchaser received certain tapes, records, and written materials. In addition, depending on the level of involvement, the purchaser had the opportunity to help sell the Dare courses to others and to receive part of the purchase price as a commission. There were four different levels of involvement.
The task of salespersons was to bring prospective purchasers to "Adventure Meetings." The meetings, which were conducted by Dare people and not the salespersons, were conducted in a preordained format that included great enthusiasm, cheering and charming, exuberant handshaking, standing on chairs, and shouting. The Dare people and the salespersons dressed in modern, expensive clothes, displayed large sums of cash, drove new expensive automobiles, and engaged in "hard-sell" tactics to induce prospects to sign their name and part with their money. In actuality, few Dare purchasers ever attained the wealth promised. The tape recordings and materials distributed by Dare were worthless. Is this sales scheme a "security" that should have been registered with the SEC? Securities and Exchange Commission v. Glenn W. Turner Enterprises, Inc., 474 F.2d 476, Web 1973 U.S. App. Lexis 11903 (United States Court of Appeals for the Ninth Circuit)