Opinion ID: 184730
Heading Depth: 3
Heading Rank: 5

Heading: The Reves Factors Viewed Collectively

Text: 40 Based on the four Reves factors, then, we conclude that the promissory notes executed by Stoiber are securities. They do not bear a strong enough resemblance to the categories of notes declared by the Supreme Court to be outside the definition of securities and the four factors do not suggest that these notes should be treated as a new non-security category. Admittedly the plan of distribution in part signals that the notes might not be securities, but that factor by itself is not dispositive. See Trust Co. of Louisiana v. NNP Inc., 104 F.3d 1478, 1489 (5th Cir.1997) (A debt instrument may be distributed to but one investor, yet still be a security.). The motivations of Stoiber and his customers and the lack of sufficient risk reducing factors other than federal securities laws strongly favor treating the notes as securities, despite the close plan of distribution. The remaining factor--the reasonable expectations of the investing public--is not relevant in this case. 41