Court Opinion

ID: 9464119
Source: CourtListenerOpinion
Date Created: 2023-08-04 23:25:26.196268+00
Date Added: 2024-06-11T17:38:28.002220
License: Public Domain

TONE, Circuit Judge,
concurring.
I am able to agree with much that Judge Cummings says in his scholarly opinion for the court, but certain doubts lead me to write separately.
For me, this is a close and difficult case. I am beset by the same doubts arising from the ordinary meaning of the words “security,” “investment contract,” and “sale” and from Congress’ basic purpose in adopting the Securities Acts that must have influenced the several district judges who have reached conclusions inconsistent with ours. Hurn v. Retirement Trust Fund, Etc., 424 F.Supp. 80 (C.D.Cal.1976); Wiens v. International Brotherhood of Teamsters, BNA Securities and Law Report (No. 397, April 6, 1977, p. A-13) (C.D.Cal.1977); Robinson v. United Mine Workers of America Health and Retirement Funds, 435 F.Supp. 245, (D.D.C.1977). The series of transactions by which Daniel acquired his interest or expectancy, such as it was, do not fit neatly into the traditional concept of a sale of a security. In addition, it may well be, as Judge Gesell believes (see Robinson, supra), that the Forman case (United Housing Foundation, Inc. v. Forman, 421 U.S. 837, 95 S.Ct. 2051, 44 L.Ed.2d 621 (1975)) and other recent Supreme Court decisions indicate “a pronounced disfavor with attempts to stretch the securities laws beyond their traditional scope.” Nevertheless, considering the breadth of the definitions of “investment contract” and “sale” in the statutes themselves and the interpretation of those terms in cases we must still regard as authoritative, I believe the balance tips in favor of the plaintiff’s position.
In reaching this conclusion, I have found little comfort in the opinion expressed by the SEC, as amicus curiae. Apparently for the first time ever, it now takes the position in its brief before us that the employee’s interest or expectancy in a plan such as this is subject to the anti-fraud provisions of the securities laws. The Commission has not been as candid as we might have hoped in acknowledging and explaining its change in position. As late as 1971 in its Institutional Investor Study submitted to Congress in connection with the consideration of the ERISA legislation, the Commission’s view was that although a non-contributory pension plan might well be an investment contract, the element of sale was lacking.1 Before that, not even the existence of a security was acknowledged. It is true that the Commission’s attention seems to have been focused largely on registration requirements rather than the anti-fraud provisions,2 but there appears to have been no intimation over the years that it viewed the antifraud provisions as applicable. The statement in the Institutional Investor Study that the Commission staff “has taken the position that the Securities Act [of 1933] does not apply”3 seemed to refer to all the disclosure provisions of that Act, not merely its registration provisions. It should be added, however, that the SEC’s former *1252position appears to have initially been based in large part on the unduly restrictive view that the employer’s contribution on behalf of the employee was a gift and that a necessary volitional element was lacking; and, so far as its public statements disclose, the Commission persisted in that position without any real reexamination of its basis.
Members of Congress considering legislative proposals after the adoption of the securities acts who relied on the SEC’s interpretation of those acts must have understood that they did not apply to transactions of the kind before us. It is realistic, however, to believe that most members of Congress understood that the SEC is not infallible, that the Supreme Court has been known to disagree with that agency’s interpretation of the securities acts, and that the applicability of those acts to various kinds of transactions, including non-contributory pension plans, has yet to be determined by the Supreme Court. It appears likely that Congress has chosen to leave the matter in that posture. I find no persuasive evidence to the contrary in the legislative history subsequent to the adoption of the securities laws.

. 3 SEC Institutional Investor Study 996 (1971).

. Between which a distinction can rationally be drawn. See SEC v. National Securities, Inc., 393 U.S. 453, 89 S.Ct. 564, 21 L.Ed.2d 668 (1969).

. Cited at note 1, supra.