Securities & Exchange Commission v. U.S. Reservation Bank & Trust

MEMORANDUM **

In this appeal, Defendants-Appellants challenge the district court’s findings that (1) the two-part investment offering by United States Reservation Bank and Trust (“USRBT”) was a “security” as defined in § 2(a)(1) of the Securities Act of 1933, 15 U.S.C. § 77b(a)(l), and § 3(a)(10) of the Exchange Act of 1934, 15 U.S.C. § 78c(a)(10), and (2) USRBT is not a “bank” within the meaning of § 3(a)(2) of the Securities Act, 15 U.S.C. § 77c(a)(2). Findings of fact are reviewed for clear error and upheld if, viewing the evidence in the light most favorable to the prevailing party, they are plausible in light of the record as a whole. See SEC v. Rubera, *230 350 F.3d 1084, 1093-94 (9th Cir.2003). “The district court’s interpretation and construction of a federal statute are questions of law reviewed de novo.” SEC v. Gemstar-TV Guide Int’l, Inc., 367 F.3d 1087, 1091 (9th Cir.2004). We affirm the district court’s finding that the investment offered by USRBT was a security but conclude that it was unnecessary for the district court to reach the issue of whether USRBT is a “bank.”

Whether USRBT is a “bank” is not relevant to whether it offered a “security” because both banks…