# Securities law

`kaal:entity:securities-law`

**Status.** derived

This node is assembled mechanically from the 16 claims that carry the concept tag `securities-law`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself.

## Every claim under this term

16 claims across 11 works, 2010 to 2025.

**2010**

- [1558614-032](https://wulfkaal.github.io/claims/1558614-032) [mechanism/argued] -- In the United States the duty to disclose risk indirectly generates risk monitoring, because directors who know they are responsible for disclosing risk have reason to monitor it even though corporate law imposes no explicit duty to monitor.
  > Directors thus may monitor for risk because they know they are responsible for dis- closing it.
  Painter and Kaal, Initial Reflections on an Evolving Standard Constraints on Risk Taking by Directors and Officers in (2010). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1558614
- [1558614-039](https://wulfkaal.github.io/claims/1558614-039) [mechanism/argued] -- Delaware courts have not explicitly imposed a duty to monitor risk, but that omission may be moot: because failing to disclose risk violates federal securities law, unmonitored risk is likely to become undisclosed risk and therefore actionable.
  > In the United States, Delaware courts have not explicitly im- posed a duty to monitor risk. Because failure to disclose risk is a vi- olation of federal securities laws, however, this may be a moot point. Unmonitored risk is likely to be undisclosed risk.
  Painter and Kaal, Initial Reflections on an Evolving Standard Constraints on Risk Taking by Directors and Officers in (2010). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1558614
- [1664809-006](https://wulfkaal.github.io/claims/1664809-006) [mechanism/argued] -- Regardless of how the Supreme Court rules in Morrison v. NAB, Congress could overrule the holding, because the question presented is one of statutory construction and Congress may amend a statute whose interpretation it dislikes.
  > Congress could overrule the holding in that case because this is
  Richard W. Painter, Wulf A. Kaal, Extraterritorial Application of US Securities Law – Will the US Become the Default Jurisdiction for (2010). SSRN: https://ssrn.com/abstract=1664809

**2012**

- [2029983-001](https://wulfkaal.github.io/claims/2029983-001) [condition/argued] -- After Morrison, parties to securities transactions can be confident that U.S. law will not apply in private suits so long as their transactions are definitively located outside the United States, a certainty that did not exist under the prior conduct and effects tests.
  > after Morrison transacting parties can be confident that U.S. law will not apply in private suits provided their transac- tions are definitively outside the United States.
  Wulf A. Kaal, Richard W. Painter, Forum Competition and Choice of Law Competition in Securities Law after Morrison v. National Austral (2012). SSRN: https://ssrn.com/abstract=2029983
- [2029983-002](https://wulfkaal.github.io/claims/2029983-002) [definitional/asserted] -- The authors stipulate that Choice of Law Competition is a subcategory of jurisdictional competition in which jurisdictions compete on substantive legal rules to attract contracting parties ex ante, with adjudication of disputes a secondary consideration.
  > Choice of Law Competition is a subcategory of jurisdictional competi- tion. The emphasis in Choice of Law Competition is on substantive legal rules to attract contracting parties. Adjudication of disputes may be of secondary importance in Choice of Law Competition.
  Wulf A. Kaal, Richard W. Painter, Forum Competition and Choice of Law Competition in Securities Law after Morrison v. National Austral (2012). SSRN: https://ssrn.com/abstract=2029983
- [2029983-031](https://wulfkaal.github.io/claims/2029983-031) [predictive/argued] *(failure mode)* -- Morrison's transactional test could prove relatively short lived because it is rooted in geography while an increasing number of securities transactions defy geographical boundaries.
  > The transactional test in Morrison could be relatively short lived because it is rooted in geography and an increasing num- ber of securities transactions defy geographical boundaries.
  Wulf A. Kaal, Richard W. Painter, Forum Competition and Choice of Law Competition in Securities Law after Morrison v. National Austral (2012). SSRN: https://ssrn.com/abstract=2029983

**2017**

- [3002908-011](https://wulfkaal.github.io/claims/3002908-011) [failure/argued] *(failure mode)* -- Despite early cautioning and a call for action from its own commissioners, the SEC has not addressed core issues pertaining to the recognition of blockchain technology applications in finance.
  > Despite this early cautioning and call for action, the SEC has not yet addressed core issues pertaining to the recognition of blockchain technology applications in finance.
  Wulf A. Kaal, Marco Dell'Erba, Blockchain Innovation in Private Investment Funds - A Comparative Analysis of the United States and (2017). SSRN: https://ssrn.com/abstract=3002908

**2018**

- [3117224-017](https://wulfkaal.github.io/claims/3117224-017) [empirical/evidenced] *(failure mode)* -- Although federal securities law is the main instrument countries use to regulate ICO technology, there is also concern about regulating exchanges, which may fall outside federal securities laws at least in part.
  > Although (federal) securities law is the main way countries are regulating this technology, there is also concern about the regulation of exchanges within such countries which may fall outside of the federal securities laws, at least in part.
  Wulf A. Kaal, Initial Coin Offerings The Top 25 Jurisdictions and Their Comparative Regulatory Responses (2018). SSRN: https://ssrn.com/abstract=3117224
- [3117224-021](https://wulfkaal.github.io/claims/3117224-021) [condition/evidenced] -- The UK Financial Conduct Authority takes the position that ICOs may be regulated as securities depending on the aspects and rights the coin holder obtains through holding the coin, assessed case by case.
  > The FCA has taken the position that ICO's may be regulated as securities depending on the different aspects and rights the coin holder obtains through holding the coin.
  Wulf A. Kaal, Initial Coin Offerings The Top 25 Jurisdictions and Their Comparative Regulatory Responses (2018). SSRN: https://ssrn.com/abstract=3117224
- [3117224-028](https://wulfkaal.github.io/claims/3117224-028) [definitional/evidenced] -- Under German law the decisive factor in classifying a token is which rights are associated with it; labels such as participation token, utility token, or payment token give only initial guidance and cannot be relied upon outside a comprehensive and binding regulatory classification.
  > A prior classification of the token (i.e. as a "participation token", "utility token", or "payment token") can provide initial guidance as to the type of token it is under German law, but is not to be relied upon outside a comprehensive and binding regulatory classification.
  Wulf A. Kaal, Initial Coin Offerings The Top 25 Jurisdictions and Their Comparative Regulatory Responses (2018). SSRN: https://ssrn.com/abstract=3117224

**2020**

- [3652481-017](https://wulfkaal.github.io/claims/3652481-017) [failure/evidenced] *(failure mode)* -- Under current securities laws, DAOs governed solely by smart contracts are restricted in their ability to pool assets and generate profit, because those laws limit their ability to fund ecosystem development and deploy capital efficiently.
  > Under current laws, DAOs solely governed by smart contracts are restricted in their ability to pool assets and generate profit because securities laws limit their ability to fund ecosystem development and deploy capital efficiently.
  Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481

**2021**

- [3782201-029](https://wulfkaal.github.io/claims/3782201-029) [failure/argued] *(failure mode)* -- Regulatory approaches of the early 2020s largely undermined the evolution of decentralized technology, because decentralized solutions at their core negate external control, censorship, and oversight while the legal initiatives treated government control as indispensable.
  > Yet, decentralized technology solutions, at their core, negate external control, censorship, and oversight. Accordingly, the then-proposed approaches largely under- mined the evolution of decentralized technology.
  Craig Calcaterra, Wulf A. Kaal, Future of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782201
- [3799320-012](https://wulfkaal.github.io/claims/3799320-012) [failure/argued] *(failure mode)* -- Under current securities laws, DAOs governed solely by smart contracts are restricted in pooling assets and generating profit, because those laws limit their ability to fund ecosystem development and deploy capital efficiently.
  > Under current laws, DAOs solely governed by smart contracts are restricted in their ability to pool assets and generate profit because securities laws limit their ability to fund ecosystem development and deploy capital efficiently.
  Wulf A. Kaal, A Decentralized Autonomous Organization (DAO) of DAOs (2021). SSRN: https://ssrn.com/abstract=3799320

**2022**

- [4021599-021](https://wulfkaal.github.io/claims/4021599-021) [failure/argued] *(failure mode)* -- Merely calling a token a utility token, or structuring it so that it provides some utility, does not prevent the token from being characterized as a security.
  > From a regulatory perspective, merely calling a token a utility token or structuring it to provide some utility does not prevent the token from being characterized as a security.34 According to SEC
  Wulf A. Kaal, Securities Versus Utility Tokens (2022). SSRN: https://ssrn.com/abstract=4021599
- [4033886-029](https://wulfkaal.github.io/claims/4033886-029) [predictive/argued] -- Legal uncertainty about crypto exchanges exerts a chilling effect on the market, and increased liquidity may follow once the market gains greater clarity on the legal issues surrounding this asset class.
  > Once the market gains greater clarity on the legal issues surrounding this new asset class, increased liquidity in the market may follow.
  Wulf A. Kaal, Samuel Evans, Hayley Howe, Digital Asset Valuation (2022). SSRN: https://ssrn.com/abstract=4033886

**2025**

- [5583610-019](https://wulfkaal.github.io/claims/5583610-019) [condition/argued] -- 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.
  > 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
  Wulf A. Kaal, Liquid Equity Rewards in Corporate America (2025). SSRN: https://ssrn.com/abstract=5583610

## Verify

Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust.

    curl -s https://wulfkaal.github.io/entities/securities-law.md | sha256sum

**Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.