B. Edmond Waters, Arkansas Securities Commissioner, Appellant v. Isaac Hal Millsap Iii, Gifford Keith Jordon, And…

Summary

The court held that Arkansas law requires an all-facts approach to deciding whether an instrument is a security, rather than exclusive application of the five-factor test used by the circuit court or adoption of the federal family-resemblance test. Because the circuit court considered only the five factors and failed to assess other relevant circumstances, including the parties' sophistication, the court reversed the summary judgments and remanded for further consideration. Justice Danielson, dissenting, would have affirmed because the transactions were ordinary loans whose repayment and interest were not tied to the borrower's venture.