The legal practitioners asked the court to adhere to the established definition of “investment contract” when interpreting its scope.
A group of six legal scholars specializing in securities law and related fields submitted
an amicus brief in favor of crypto exchange Coinbase in its ongoing legal battle against the
United States Securities and Exchange Commission (SEC).
An amicus brief is a document filed in court by a party not directly involved with the related case.
It is generally used to add supporting arguments to one side of the lawsuit and emphasizes how
the case will have a broader impact beyond the involved parties.
The group of legal scholars filed the amicus brief in the U.S. District Court for the Southern District of New York on Aug. 11.
On the same day, Senator Cynthia Lummis also submitted an amicus brief in support of the crypto exchange.
The scholars behind the filing are Stephen Bainbridge of the University of California,
Los Angeles; Tamar Frankel of Boston University School of Law; Sean Griffith of Fordham
University School of Law; Lawrence Hamermesh of Widener University, Delaware Law School;
Matthew Henderson of the University of Chicago Law School; and Jonathan Macey from Yale Law School
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.