MFA, and other trade associations, filed an amicus brief in SEC v. Carebourn, urging the U.S. Court of Appeals for the Eighth Circuit to reject the lower court’s holding that an entity is a dealer under the Securities Exchange Act of 1934 if its business is based on the buying and selling of securities.
The brief urges the 8th Circuit to reject the SEC’s view that Carebourn is a dealer simply because it “engaged in a high volume of buying and selling securities.” As Acting Chair Mark Uyeda rightfully said, such a view is “arbitrar[ily] and even tyrannical[ly]” overbroad. If the lower court’s holding stands, any professional investor or investment fund, such as a private fund or mutual fund, could potentially be considered a dealer.
