Cengage Advantage Books: Introduction to Business Law 4th Edition by Timothy Koch, Jeffrey Beatty, Jeffrey Beatty, Susan Samuelson, Susan Samuelson

Exercise 12

Jonah bought 12 paintings from Theo's Art Gallery, at a total cost of $1 million. Theo told Jonah that the paintings were a safe investment that could only go up in value. The gallery permitted any purchaser to trade in a painting for any other artwork the gallery owned. In the trade-in, the purchaser would get credit for the amount of the original painting and then pay the difference if the new painting was worth more. When Jonah's paintings did not increase in value, he sued Theo for a violation of the securities laws. Were these paintings securities