Definition of security. Traditional instruments such as stocks and bonds. Investment contracts as defined by the Howey test.
Investor invests money.
In a common enterprise. To make a profit off of the significant efforts of others. Requires disclosure of pertinent information to potential buyers of newly-issued securities. Registration statement - has to be filed with the SEC by the issuer and describes such things as the securities, the registrant s business, management, and competition, how the proceeds are to be used, pending litigation, government regulation, and any special risk factors. Prospectus - contains much the same information as in the registration statement and must be given to prospective buyers.