Opinion ID: 199659
Heading Depth: 2
Heading Rank: 1

Heading: Investment of Money.

Text: 29 The first component of the Howey test focuses on the investment of money. The determining factor is whether an investor chose to give up a specific consideration in return for a separable financial interest with the characteristics of a security. Daniel, 439 U.S. at 559. We conclude that the SEC's complaint sufficiently alleges the existence of this factor. 30 To be sure, SG disputes the point. It argues that the individuals who purchased shares in the privileged company were not so much investing money in return for rights in the virtual shares as paying for an entertainment commodity (the opportunity to play the StockGeneration game). This argument suggests that an interesting factual issue may await resolution -- whether participants were motivated primarily by a perceived investment opportunity or by the visceral excitement of playing a game. Nevertheless, this case comes to us following a dismissal under Rule 12(b)(6), and the SEC's complaint memorializes, inter alia, SG's representation that participants could firmly expect a 10% profit monthly on purchases of the privileged company's shares. That representation plainly supports the SEC's legal claim that participants who invested substantial amounts of money in exchange for virtual shares in the privileged company likely did so in anticipation of investment gains. Given the procedural posture of the case, no more is exigible to fulfill the first part of the Howey test. 31