1. Could Howey adjust the business model and retool the opportunity without triggering securities regulation? How?
2. Recall from the facts that the service contract was optional and approximately 20 percent of the investors purchased the real estate only. Do those 20 percent of investors satisfy the four-part test? Was it enough to satisfy the test that all investors had the mere opportunity to enter into the service agreement?

Howey owned large tracts of citrus acreage and offered an investment opportunity whereby investors could purchase a certain tract of the real estate and enter into an optional service agreement in which Howey would care for and harvest the citrus crop and those that signed would be given a percentage of the profits from the harvest. Approximately 80 percent of the investors entered into the service contract and the SEC charged Howey with several violations of federal securities law, alleging that the investment constituted a security subject to registration requirements. Howey argued that the transaction was simply a contractual agreement for a real estate purchase with an optional profit sharing opportunity and both the trial court and circuit courts of appeals agreed.