Sixty-four years ago, the Supreme Court decided SEC v. W.J. Howey, crafting a definition for one form of security, known as an investment contract. The Supreme Court's definition of investment contract in Howey is flexible, consistent with the Congressional approach to defining the broader concept of what constitutes a security. This choice of adopting a flexible definition for investment contract is not without cost, and raises the specter of inconsistent interpretation and/or application by

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... e lower courts that threatens to undermine the utility of the Howey test itself as a trigger for investor protection. The intentional breadth and adaptability of the definition of investment contract necessarily leads to complex and factintensive judicial inquiries in the application thereof, and allows for inconsistent results between and among the various courts engaging in such inquiries, creating the possibility of similarly-situated litigants winding up with dissimilar outcomes. Examples of these disparate outcomes are present in a number of industries, including the viatical settlement industry. Viatical settlements are a form of "asset-backed securities" under which purchasers buy the right to receive death benefits under life insurance policies from policyholders. These days, the very words "asset-backed security" may cause the public to recoil in horror, thinking of the sub-prime mortgage * Miriam R. Albert, Professor of Skills,