Commercial Notes and Definition of “Security” under Securities Exchange Act of 1934: A Note Is a Note Is a Note?

I. Introduction II. The Cases Pro and Con … A. The Cases Pro … B. Analysis of the Reasoning of the Cases Pro … 1. The Statute Itself … 2. Legislative History … 3. Relevant Case Law … C. The Cases Con III. The Ramifications of an Affirmative Answer … A. Substantive Ramifications … 1. Comparative Ease of Proof under Rule 10b-5 … 2. Liability of “Controlling Persons” under the 1934 Act … 3. Security for Expenses Requirements in Derivative Suits … 4. The Anti-Waiver Provision of the 1934 Act … B. Procedural Ramifications … 1. The 1934 Act … 2. The Federal Rules of Civil Procedure IV. Suggested Criteria … A. Common Expectations … B. Use of the Proceeds … C. Relying on the Efforts of Others: Risk, Rights Repayment, Recourse … 1. Risk … 2. Rights Given to the Payee … 3. Methods of Repayment … 4. Methods of Recourse … D. The Numbers Games … E. Time Elements … F. Characterization of the Notes on the Relevant Financial Statements V. Conclusion