SEC v. W.J. Howey Co. (1946)
The Supreme Court ruled that Howey's offer of citrus grove contracts plus service agreements was an investment contract. It set a four-part test: money invested in a common enterprise with profits expected from the efforts of others.
Howey was enjoined from offering the contracts without registering.
The Howey test became the standard for what counts as a security in the U.S.
The 'essential managerial efforts' test the buyback guidance addresses is the modern form of Howey's 'efforts of others' prong.
