Court Opinion

ID: 8894328
Source: CourtListenerOpinion
Date Created: 2022-11-26 23:42:53.787262+00
Date Added: 2024-06-11T17:07:23.375677
License: Public Domain

SNEED, Circuit Judge
(concurring in the result):
While I concur in the result reached by my brothers, I do think it necessary to draw attention to what appears to me to be a regulatory anomaly resulting from this decision. The primary abuse that flows from brokered funds is the encouragement it provides to banks to make unsafe loans. This is essentially a *1125banking problem and thus a primary responsibility of the Comptroller of the Currency and the Federal Deposit Insurance Corporation. Nonetheless, this decision subjects the practice to a degree to regulation by the Securities and Exchange Commission. My concern with this anomaly is moderated by the fact that all three agencies are prepared to accept the proposition that, at least under come circumstances, brokered deposits may be investment contracts within the meaning of the Securities Act.
At this point I should not like to be understood as embracing the view that in all events a brokered deposit is an investment contract. In this case I am prepared to accept the conclusion that representations and activities of the broker are sufficiently similar to the breeding and marketing of beavers in Continental Marketing, Inc. v. S. E. C., 387 F.2d 466 (10th Cir., 1967), cert. denied, 391 U.S. 905, 88 S.Ct. 1655, 20 L.Ed.2d 419 (1968) to make that ease persuasive authority. The mere statement of this proposition demonstrates that our decision in this case approaches the outer limits of the reach of Continental Marketing. I have grave doubts, for example, that the % % bonus offered by Wagner alone is sufficient to transform the entire package into a nonexempt investment contract. Nor am I prepared at this time to acknowledge that such an increased return is in all cases conclusive evidence of the type of activities which in this case brings the entire package within the doctrine of Continental Marketing.
Finally, it must be remembered that in Continental Marketing the court emphasized that under the facts before it the investor was investing in a common enterprise to establish a domestic beaver industry the returns from which were uncertain. This justified the “investment contract” designation. A certificate of deposit even when accompanied by a bonus under some circumstances-may not constitute such an investment. The passivity of all but the issuing bank and its borrower may reach a level that requires the rejection of the “investment contract” characterization.
With these reservations, I concur in the result.