Securities And Exchange Commission v. Mcdonald Investment Co.

343 F.Supp. 343 (1972)

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Nature of the Case

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Facts

D was organized and incorporated in the State of Minnesota on November 6, 1968. The principal and only business office from which the defendants conduct their operations is located in Rush City, Minnesota, and all books, correspondence, and other records of the company are kept there. D registered an offering for $4,000,000 of its own installment notes with the Securities Division of the State of Minnesota pursuant to Minnesota law. Sales of the installment notes, are to be made to Minnesota residents only. Those purchasing D's securities will have only the general unsecured debt obligation of the company. The proceeds from the installment notes will be lent to land developers with security taken from them in the form of mortgages or other liens running to the defendant corporation. The note purchasers will not have any direct ownership or participation in the mortgages or other lien security, nor in the businesses of the borrowers. P sued D for a failure to register as required under the Securities Act of 1933. P has asked for a permanent injunction.