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Ernst&Young LLP Form

Ernst&Young LLP Form

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generally a promissory note given in consideration of a business transaction is a cash substitute not a security under federal securities laws however a note may be a security if it's given as an investment in the 1990 case reeves versus ernst young the united states supreme court considered whether a note issued to raise money for a farmer's cooperative was a security the farmer's cooperative of arkansas and oklahoma was an agricultural cooperative with more than 20 000 members to raise money for its business operations the co-op sold notes to members and non-members the notes were uncollateralized uninsured and payable on demand at a variable interest rate that was higher than the rate at local financial institutions additionally the co-op published advertisements for the notes in its newsletter in 1984 the co-op filed for bankruptcy at the time over 1 600 people including bob reeves held co-op notes that totaled 10 million dollars subsequently reeves and othe

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