Would a poker buyin share voucher be a &quot;security&quot;? Hello I am trying to learn more about securities and really confused by the laws regarding unregistered securities in the US. NJ state if that helps too. I made a scenario and I am needing help to understand if this would be legal or not. In online poker you play poker and when you win the tournament against other players then are granted a entry ticket into the next event. As you may know you can win money in poker. I am having trouble understanding the Howey Test which is &quot;investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.&quot; Which is used to deem what is and isn't a security. Here's my thought experiment from my thinking into this concept: If you were to play a poker tournament, win it and be issued a ticket that gave you access to a percentage of all the money paid into the NEXT tournament by other players (let's call it a &quot;money ticket&quot;) as a prize would this &quot;money ticket&quot; be a security? Why/why not? The &quot;money ticket&quot; would basically be a revenue share voucher. Edit: What if you only got the profits if you won the second tournament as well? Would the ticket still be a security? Thank you!
Almost certainly yes. As you say, the test is indeed the Howey Test, which, as you say, asks if it is an &quot;investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.&quot; Here, the &quot;efforts of others&quot; would be running the poker tournament. The &quot;expectation of profits&quot; is to be derived from the proceeds of their efforts running the tournament, advertising it, etc. It's basically pretty similar to receiving something like equity in the tournament, and equity is of course well-established to be a security. To avoid running afoul of laws against unregistered security offerings, they would likely need to either limit the people who could win such a ticket to accredited investors or go to the trouble of formally registering the securities. The latter isn't impossible: banks routinely register a wide variety of securities that they sell to their various customers. But it is a lot more process, and banks who do this are set up to be able to do it with as little process overhead as possible. Whether that would be practical for a company running poker tournaments would probably depend a lot on the details of the situation.
Note that what is being bought or sold here is actually information about the exploit. Attempting to criminally penalize the transmission of information in the US often runs into First Amendment issues. If a person has good reason to know that information is going to be used to commit a crime, or is likely to be so used, and there is no plausible legitimate use for the information, that person might be charged with complicity or conspiracy for distributing the information. But where there are legitimate uses, that is much less likely. Here the information could be used to defend against the exploit, or to identify and remove software subject to the exploit, or for research into such exploits generally. There may be other legit uses as well. Some years ago the Federal government attempted to prosecute a person for exporting a book describing how to create an encryption program. The courts eventually ruled that this was protected speech. I suspect a similar ruling would be made in the sort of case described in the question, but the details would matter.
In the worst case if they shut shop, then how might I go about getting my money back? It is unlikely that you can. A SAFE is not a loan (and for that matter isn't even a share in the company) and doesn't create an enforceable contractual right to get your money back. If you make an equity investment and the company loses money and goes out of business, you lose everything you invested. If the promoter made false representations that induced you to invest, or actively concealed material facts about the investment, you might be able to sue the promoter for securities fraud under federal regulation 10b-5, or under a state securities law, or under a common law fraud theory. You could also sue to issuer of the investment (i.e. the company) but that would usually be futile because the company is broke and hence judgment proof. State or federal securities regulators or a local district attorney or state attorney-general might pursue the case in lieu of a private civil action by you, but getting them to take action is often quite difficult. But, if your investment wasn't induced by fraud and instead the management of the company simply made bad decisions that caused the company to fail, you have no remedy. The investment was for a SAFE (Simple Agreement for Future Equity). I have the signed SAFE with me. This is a very unusual way for a QoZ to be structured, which adds to the sense that this may have been a shady venture.
No California has no laws on social gambling so it is treated identically to commercial gambling. Since betting on outcomes other than sports betting is illegal in California, such a bet would be illegal. While it’s unlikely to be prosecuted, as a contract it would be void its illegality and thus unenforceable.
It might possibly be illegal. For criminal law, usually you need to obey the laws of three countries: The country you are a national of (by personality principle) The country from where you make the sale (by territoriality principle) The country that hosts the attacked interest (by territoriality principle) Then it depends on the jurisdiction (and other factors) whether the sale is legal or not. I'll use the example of my country, Czech Republic. There is a crime called "Unauthorized access to a computer system or data storage device". For example, you commit this crime by exploiting a vulnerability in a web application and copying the web owner's data on your computer. It is also codified that whoever wilfully facilitates the committing of a crime by providing the criminal with resources (such as the exploit) is considered to have also committed the crime. For this to apply, you must have known or expected that the exploit will be used to commit a crime. The courts would decide this.
Yes, they are. A business can decide not to do business with someone for pretty much any reason. The obvious prohibited reason is due to your race. But I don't see how eBay would even know your race. Some State laws might protect you, but I don't think there's any that applies in this case. For example, California might give you a means of appeal if someone stole your identity and they performed those transactions, not you. But I don't know of any Federal or State law that would change the very, very basic principle of law that a property owner gets to decide who can and cannot access their property. eBay owns eBay. One key benefit of ownership is precisely that you can make decisions that other people consider to be unfair, discriminatory (other than the specifically prohibited categories) and draconian. Other people don't have to agree with your decisions for them to be lawful.
Maybe not. The ICO says that The right of access enables individuals to obtain their personal data rather than giving them a right to see copies of documents containing their personal data. It might be valid to interpret the DPA / UKGDPR in a way that the relevant personal data undergoing processing in their system is the existence of the letters, but that you are not entitled to a copy of the letters. This is in line with the purpose of the right to access, that you can check what data they are processing about you and whether it is correct. If that argument holds and the data subject insists on receiving a copy of the letters, it might be legitimate to charge them a fee for these copies. But in practice: The data controller might not make this argument and just hand over the copies. It is worth a try. A right to access founded in data protection might not be the only way to receive a copy of these materials. If the letters are relevant for legal proceedings, they could perhaps be requested during the disclosure process.
The criminal complaint against Sarao can be found on the US Department of Justice's website. He was charged under four different sections of US Code: 18 USC 1343, which prohibits the use of inter-state or foreign telecommunications in the furtherance of a fraudulent scheme. 18 USC 1348, which prohibits fraud concerning securities and commodities markets. 7 USC 13(a)(2), which prohibits manipulation of commodities markets. 7 USC 6c(a)(5)(C), which specifically prohibits "spoofing" of commodities markets. It's this last one that you seem to be most interested in. Spoofing is defined as "bidding or offering with the intent to cancel the bid or offer before execution." In other words, it's legal to change your mind after you place an order, but it's not legal to place an order that you have no intent of following through on. This section was actually enacted as part of the Dodd-Frank Act, which took effect a few months after the "Flash Crash"; the charge against Sarao under this section stemmed from actions he took later, in 2014. The charges against Sarao specifically relating to the "Flash Crash" were under the wire fraud and securities fraud statutes instead. In the end, Sarao pled guilty to one count of wire fraud (covering his ongoing actions from 2009–2014) and one count of spoofing, presumably as part of a plea deal.