Warfield v. Alaniz

Dillie's foundation sold charitable gift annuities promising lifetime income payments to investors and any remainder to the investor's chosen charity after death, marketed heavily around long-term income potential, while funding current payouts using newly invested money and paying agent commissions; after the SEC pursued civil action against Dillie, receiver Warfield (plaintiff) sued to recover agent commissions, and the district court found the annuities were investment contracts subject to SEC jurisdiction. Warfield appealed, arguing investors had no genuine profit expectation because they intended proceeds for charity and because the annuities' present value was always less than the purchase price.