Opinion ID: 184730
Heading Depth: 3
Heading Rank: 2

Heading: The Second Reves Factor--Plan of Distribution

Text: 27 Under the second Reves factor, we examine the plan of distribution of a note to determine whether it is an instrument in which there is common trading for speculation or investment. Reves, 494 U.S. at 66, 110 S.Ct. 945 (citation and internal quotation marks omitted). [T]he requisite 'common trading'  is established if the instrument is offered and sold to a broad segment of the public.... Id. at 68, 110 S.Ct. 945. 28 This factor points in no clear direction in this case. While the terms of the notes do not preclude trading in a secondary market, none have been resold and there is no indication that anyone has considered reselling them. Nor do we think thirteen customers with whom Stoiber had a personal relationship constitute a broad segment of the public. 29 On the other hand, Stoiber solicited individuals, not sophisticated institutions. While his solicitations included individual presentations, he offered his customers little detail. These facts suggest common trading. See RTC v. Stone, 998 F.2d 1534, 1539 (10th Cir.1993); Banco Espanol de Credito v. Security Pac. Nat'l Bank, 973 F.2d 51, 55 (2d Cir.1992).