SEC v. W.J. Howey Co. is a landmark case in U.S. securities law that established the "Howey test" as a standard for determining whether a transaction constitutes an "investment contract" and is therefore subject to regulation under the Securities Act of 1933.

The case arose from a dispute between the U.S. Securities and Exchange Commission (SEC) and the W.J. Howey Co., a Florida-based company that was involved in real estate development.

The SEC argued that the company's sale of land parcels, which included an option to purchase shares in a citrus grove that was being developed on the land, constituted the sale of securities and should be subject to federal regulation.

Under the Howey test, a security is defined as:

1. An investment of money

2. In a common enterprise

3. With the expectation of profit

4. To be derived from the efforts of others

The U.S. Supreme Court ruled in favor of the SEC, holding that the land sales constituted the sale of securities because they involved an investment of money in a common enterprise with the expectation of profits.

The Court's ruling established the Howey test as the standard for determining whether a transaction is an investment contract and therefore subject to regulation under the Securities Act of 1933. The Howey test has since been widely applied in U.S. securities law and has been cited in numerous cases involving the definition of securities and the regulation of investment contracts.

This image was co-created with DALL·E 2, and is based on a historical illustration of the entrance to the citrus groves in Howey-in-the-Hills, Florida, USA. The entrance and orange groves were in the original historical illustration, and the men in suits executing a contract were added by DALL·E 2.

You can view a historical photograph of this archway in Howey in the Hills at the State Library and Archives of Florida at the URL below:

http://www.floridamemory.com/items/show/141302

The mansion originally owned by Howey is still around as of 2022 and is located at The Howey Mansion is located at 1001 Citrus Ave., Howey in the Hills, Florida. The mansion is available to rent for private events like weddings and fundraisers.