Seite - 125 - in Austrian Law Journal, Band 1/2015

ALJ 1/2015 Observations on Judicial Approaches to Discerning Investment Adviser Status 125 Letters183 for determining whether one “holds himself out”184 to the public as an investment ad- viser. More fundamentally, Zinn’s characterization of In re Loring fails to recognize that the vast ma- jority of services provided by Loring were under court supervision, subject to a bonding require- ment. This fact would support the Commission granting the exemptive request in In re Loring. Similarly, Zinn appears not to appreciate that the standard applied by the Commission in the In Re Loring exemptive application under § 202(a)(11)(H) is whether the applicant is a person “not with- in the intent” of § 202(a)(11). This is a far more general and inclusive standard than determining the reach of the engage in the business language of § 202(a)(11). Finally, the Zinn decision does not acknowledge that Congress in enacting the Advisers Act choose to include “solely incidental” and “holding out” language in other provisions of the Adviser Act but not § 202(a)(11). Indeed, Zinn’s imposition of the “holding out” to the public test and “solely inci- dental” limitation is not supported by the language of § 202(a)(11) and is undercut by the struc- ture of the Advisers Act. Under § 202(a)(11), the definition of an investment adviser does not include “solely incidental” language. In contrast, the professionals exception under § 202(a)(11)(B) and broker-dealer exception under § 202(a)(11)(C) both limit offering investment adviser that is “solely incidental to the conduct” of the practice of a profession and business as a broker or deal- er, respectively. Under § 202(a)(11) the definition of an investment adviser does not include any reference to “holding out” to the public. Under former § 203(b)(3) an investment adviser is not required to register with the Commission if certain requirements are met, such as that it does not “hold[s] itself out to generally to the public as an investment adviser.” Zinn’s approach is difficult to accept in light of the Supreme Court’s holding in Barnhart v. Sigmon Coal Company, Inc.,185 where the court held that “when ‘Congress includes particular language in one section of a stat- ute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.’” 2. Alternative Approaches to Engage in the Business Courts may benefit from taking a fresh approach to the engage in the business element. Although neither the word “engage” nor “business” is defined by the Advisers Act, these words appear in other federal statutes and courts have routinely looked to their “ordinary and natural”186 mean- ings in interpreting the words “engage”187 and “business”188 Some courts have been called upon 183 See supra footnote 165 above; see also Wilson v. Merrill Lynch & Co., 671 F.3d 120, 137 n.11 (2d Cir. 2011) (dis- cussing degree of judicial deference due Commission staff No-Action Letters); Gryl ex rel. Shire Pharm. Grp. PLC. v. Shire Pharm. Grp. PLC, 298 F.3d 136, 145 n.8 (2d Cir. 2002) (citations omitted) (“It must be remembered, howev- er, that SEC no action letter responses are staff interpretations rather than formal Commission action and thus are of more limited utility than formal rulemaking or policies announced in SEC releases.”). 184 Zinn, 644 F.2d at 363 (citations omitted) (“Among the factors the SEC looks to in determining whether someone ‘holds himself out’ as an investment adviser are: ‘(t)he maintenance of a listing as an investment adviser in a tele- phone or business directory’; ‘the expression of willingness to existing clients or others to accept new clients’; or ‘the use of a letterhead indicating any activity as an investment adviser.’”). 185 534 U.S. 438, 453, (2002) (citations omitted). 186 Scherr v. Marriott Int’l, Inc., 703 F.3d 1069, 1077 (7th Cir. 2013) (“When we do not have statutory definitions available, we accord words and phrases their ordinary and natural meaning and avoid rendering them mean- ingless, redundant, or superfluous; we view words not in isolation but in the context of the terms that sur- round them; we likewise construe statutes in the context of the entire statutory scheme and avoid rendering statutory provisions ambiguous, extraneous, or redundant; we favor the more reasonable result; and we avoid construing statutes contrary to the clear intent of the statutory scheme.”). 187 See, e.g., U.S. v. Graham, 305 F.3d 1094, 1102 (10th Cir. 2002) (“The term ‘engage’ is commonly defined as ‘to occupy or involve oneself; take part; be active.’ Webster’s New World College Dictionary at 450 (3rd ed.