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A group of six legal scholars specializing in securities law and related domains have submitted an amicus brief in favor of crypto exchange Coinbase in its legal battle against the U.S. Securities and Exchange Commission (SEC).
An amicus brief is a legal instrument submitted to the court which originates from a party not directly engaged in the pertinent case. Its typical purpose is to provide supplementary arguments in favor of one side of the lawsuit while underscoring the wider implications that the case may carry beyond the immediate litigants.
The group of legal scholars presented their amicus brief to the U.S. District Court situated in the Southern District of New York. Leveraging their understanding of securities laws, they embarked upon the task of shedding light on the intricate historical underpinnings of these legal frameworks.
It is worth highlighting that this noteworthy action followed Senator Cynthia Lummis’ own submission of a favorable amicus brief, which took place a day prior on August 11.
The following individuals, namely Stephen M. Bainbridge of UCLA, Tamar Frankel of Boston University, Sean J. Griffith hailing from Fordham Law School, Lawrence Hamermesh representing Widener University, M. Todd Henderson associated with the University of Chicago Law School and Jonathan R. Macey from Yale Law School, are the scholars who have collectively assumed the role of amici. Their collective effort has outlined an illustrative chronicle detailing the evolution and delineation of investment contracts, as manifested in the submitted filing.
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In their filing, the legal practitioners contended that federal precedents, as encapsulated by the Howey test, acknowledge that “investment contracts” necessitate anticipation of business income, profits, or assets. In general, the esteemed law scholars advocated for the Court to steadfastly adhere to the established definition of the term ‘investment contract’ when interpreting its scope.
“An investor must be promised, by virtue of his or her investment, an ongoing contractual interest in the income, profits, or assets of the enterprise. In this section, we discuss some of these cases.”
Meanwhile, the group of legal scholars clarified that their affiliations with universities or law schools in no way bear any relevance to their involvement with the amicus brief.
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