# kaal:claim:5583610-019

**Claim.** 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.

**Type.** condition  **Support.** argued

**Holds when.**

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

**Source quote.**

> 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, page 12

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

**Verify.** sha256 of source PDF `2d73609d95ddb1573acc2a9e7af617fbe6283d6e591deb6317f6d5d804517c62` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202025%20-%20Liquid%20Equity%20Rewards%20in%20Corporate%20America.pdf

**Topics.** securities-law

**Keywords.** howey-test, investment-contract, securities-law, utility-only

**Related claims.**

- specializes: https://wulfkaal.github.io/claims/4021599-013

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