A corporation, Platforms, held stock that was not registered with the SEC under the Securities Act of 1933. William Martin provided consulting to Platforms as an employee of a sole proprietorship called IntermediaVideo Marketing Company. Martin alleged that in exchange for the consulting services, Intermedia earned at least 17.45 million unregistered shares of Platforms stock, but “these shares were not issued to Intermedia.” The SEC filed a civil enforcement action against Platforms and Martin for violating Section 5 of the Securities Act by selling to the public the 17.45 million unregistered Platforms securities. The defendants did not dispute that the transactions were unregistered securities; however, the defendants did dispute whether the transactions qualified for an exemption from the registration requirement. The district court granted the SEC partial summary judgment on its Section 5 claim regarding unregistered securities. On appeal, the defendants alleged that there was a registration exception in this case: “[T]here is a genuine issue of material fact whether the issuance of shares by Platforms qualified for an exemption under Securities Act Section 4(2), because they took reasonable care to assure that Intermedia was not an underwriter.” The appellate court denied the defendants this exception and affirmed the summary judgment of the district court. Why do you think the appellate court did not believe that the defendants qualified for the registration exception?