kaal:claim:5583610-019

LER units are not securities because they fail the third and fourth Howey prongs: they carry no expectation of speculative profit and their accrual does not depend on the entrepreneurial efforts of others.

Source quote, verbatim

While LERs may satisfy the first two prongs, they fail to meet the critical third and fourth prongs, thus ensuring they are not securities under U.S. federal securities law

From

Wulf A. Kaal, Liquid Equity Rewards in Corporate America (2025), 3.2. U.S. Securities Regulation, p. 12
https://ssrn.com/abstract=5583610 · source PDF

Cite as

Wulf A. Kaal, Liquid Equity Rewards in Corporate America (2025). SSRN: https://ssrn.com/abstract=5583610

Holds when

vouchers remain non-transferable and untradeable
accrual is automated and the issuer's role stays ministerial

Classification

conditionsupport: arguedsecurities-law

Related claims

specializes kaal:claim:4021599-013 Under the Howey framework the U.S. Supreme Court supplies the investment contract analysis that determines whe...

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