Securities and Exchange Commission v. R.G. Reynolds Enterprises, Inc. Richard Reynolds

This appeal presents the question whether interests in two separate investment programs sold by Richard Reynolds and R.G. Reynolds Enterprises, Inc. are securities. We hold that they are and affirm the district court’s award of summary judgment in favor of the Securities and Exchange Commission.

I

Richard Reynolds formed R.G. Reynolds Enterprises, Inc. in January 1985. As president, sole shareholder, and chairman of the board of Reynolds Enterprises, Reynolds directed its operations, which included the sale of the investment programs that are at issue in this appeal, a weekday financial talk show on the radio, “The Reynolds Rap,” and a television show on the same subject called “The Reynolds Report.” Reynolds also published a monthly financial newsletter, “The Reynolds Report,” and offered personal investment advice through consultations with persons who paid the subscription fee.

The Managed Account. Beginning in 1985, Reynolds and Reynolds Enterprises offered and sold an investment program that Reynolds variously called a “Managed Account,” a “discretionary account,” the “30% Net Investment Program,” and the “Loan Program.” Whatever name was used, an investment in the program…