Securities and Exchange Commission v. Edwards

Edwards (defendant) sold payphone leases requiring a $7,000 upfront payment in exchange for a fixed monthly return, but his company became insolvent and filed for bankruptcy; the SEC (plaintiff) sued, alleging the payphone investment product was an unregistered security, and the court of appeals ruled for Edwards, holding that a promise of a fixed return failed the third Howey prong (expectation of profits from others' efforts).