Page - 126 - in Austrian Law Journal, Volume 1/2015
Image of the Page - 126 -
Text of the Page - 126 -
ALJ 1/2015 Brian Carroll 126
to interpret the phrase āengage in the businessā as it appears in other federal statutes,189 in-
cluding definitional provisions of the Commodity Exchange Act.190
In addition to interpreting this language, the Advisers Act itself offers guidance. Ā§ 222, State
Regulation of Investment Advisers, among other things, addresses the allocation investment
adviser oversight authority among states. In part, this allocation is dependent on the location
of the advisers āplace of business.ā191 To explain the meaning of this term, the Commission
promulgated Rule 222-1, Definitions, which states in part: ā(a) Place of business. āPlace of busi-
nessā of an investment adviser means: (1) An office at which the investment adviser regularly
provides investment advisory services, solicits, meets with, or otherwise communicates with
clients [ā¦].ā192 Putting aside the office location context, these factors arguably describe in gen-
eral terms conduct that tend to reflect engaging in the business of an investment adviser. They
focus on regularly providing investment advice, soliciting clients and servicing clients. At its
essence, these activities speak to the potential components of an engaged in the business
approach that are consistent with the language and structure of the Advisers Act.
VI. Conclusion
This analysis of judicial approaches to interpreting the elements of Ā§ 202(a)(11) and the accom-
panying observations illustrate the variety of definitional issues that for the most part remain
undeveloped. In some instances, courts have tended toward an āI know it when I see itā193 tact in
relying on certain facts to support investment adviser status, with little resort to the language or
structure of the Advisers Act. In others, there is some effort to identify a nascent legal concept to
support a particular approach, but again without developing it within the structure of the Advis-
ers Act or other relevant legal authority. It is hoped that some of the observations offered may
provide a starting point for building a more grounded and reflective approach to interpreting
these elements, which may eventually be recognized by courts as an appropriate approach.
1997)ā); see also Gibbs v. I-Flow, Inc. 2009 WL 482285 3 (S.D. Ind. 2009) (applying similar dictionary definition
to define the term āengageā); BLACKāS LAW DICTIONARY 474 (5th ed. 1979) (defining āengagedā as āto employ
or involve oneself; to take part in; to embark on.ā).
188 See, e.g., U.S. v. Graham, 305 F.3d 1094, 1103 n.5 (10th Cir. 2002) (āSee also Blackās Law Dictionary at 198 (6th
ed. 1990) (defining business as ā[e]mployment, occupation, profession, or commercial activity engage in for
gain or livelihood.āā); see also U.S. v. Mazza-Alaluf, 607 F. Supp. 2d 484, 489 (S.D.N.Y. 2009) (āThe statute [USA
Patriot Act] does not define the ābusiness,ā which should be afforded its ordinary meaning as an enterprise
that operates for profit. See Travelers Insurance Co. v. Carpenter, 411 F.3d 323, 334 (2d Cir. 2005) (utilizing
Blackās Law Dictionary to define a term undefined by statute); Blackās Law Dictionary (8th ed. 2004) (defining
business as ā[a] commercial enterprise carried on for profit.āā).
189 See, e.g., Bryan v. U.S., 524 U.S. 184 (1998) (discussing, inter alia, the āengaged in the businessā language of 18
U.S.C. 922(a)(1)); U.S. v. Day, 476 F.2d 562, 567 (6th Cir. 1973) (citations omitted) (interpreting āengaged in the
businessā phrase).
190 U.S. Commodity Futures Trading Commission v. Hall, 2014 WL 4942312 (M.D.N.C. 2014) (discussing, inter alia,
the engaged in the business language of Ā§ 1a(12)(A) of the Commodity Exchange Act defining a commodity
trading advisor).
191 See Ā§ 222, State Regulation of Investment Advisers, 15 U.S.C. Ā§ 80b-22 (reference to investment adviser āplace
of businessā throughout Ā§ 222).
192 Rule 222-1, Definitions, 17 C.F.R. Ā§ 275.22-1. See also Rule 202(a)(30)-1(c)(4), 17 C.F.R. Ā§ 275.2(a)(30)-1(c)(4),
(defining investment adviser āplace of businessā as identical to definition of investment adviser āplace of busi-
nessā appearing in Rule 222-1(a), 17 C.F.R. Ā§ 275.22-1(a)). See generally Rules Implementing Amendments to
the Investment Advisers Act of 1940, Investment Advisers Act Release No. 1633 (May 15, 1997), 62 FR 28112
(May 22, 1997) (adopting rule release).
193 Jacobellis v. Ohio, 378 U.S. 184, 197 (1964) (Stewart concurring) (when discussing difficulty in defining hard-core
pornography, Justice Stewart stated, āI know it when I see it.ā)
back to the
book Austrian Law Journal, Volume 1/2015"
Austrian Law Journal
Volume 1/2015
- Title
- Austrian Law Journal
- Volume
- 1/2015
- Author
- Karl-Franzens-UniversitƤt Graz
- Editor
- Brigitta Lurger
- Elisabeth Staudegger
- Stefan Storr
- Location
- Graz
- Date
- 2015
- Language
- German
- License
- CC BY 4.0
- Size
- 19.1 x 27.5 cm
- Pages
- 188
- Keywords
- Recht, Gesetz, Rechtswissenschaft, Jurisprudenz
- Categories
- Zeitschriften Austrian Law Journal