MOTION for Leave to File to file an amicus brief by NEW FINANCE INSTITUTE. (Attachments: # (1) Exhibit A - Proposed Brief, # (2) Text of Proposed Order)(Parlatore, Timothy)
Page 1 UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
v.
BINANCE HOLDINGS LIMITED, et al.,
Defendants.
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CIVIL ACTION NO. 1:23-cv-01599-ABJ-ZMF
MOTION OF NEW FINANCE INSTITUTE FOR LEAVE TO FILE AN
AMICUS CURIAE BRIEF IN SUPPORT OF PLAINTIFF’S OPPOSITION
TO DEFENDANTS’ MOTIONS TO DISMISS
Pursuant to LCvR 7(o)(1), New Finance Institute, Inc. (“NFI”) respectfully requests leave
to file an amicus brief in support of plaintiff SEC’s opposition of motion to dismiss filed by
Defendants BAM Management US Holdings Inc. and BAM Trading Services Inc. (ECF No. 117),
and the motion to dismiss filed by Defendants Binance Holdings Limited and Changpeng Zhao
(ECF No. 118) (collectively, “Motions”).
Movant herein contacted all counsel for Plaintiff and Defendants via email on November
14, 2023.
Plaintiff, Securities and Exchange Commission, and Defendants, Binance Holdings
Limited and Changpeng Zhao, take no position on NFI’s request for leave and reserve their rights
to object upon filing accordingly. Defendants BAM Management US Holdings Inc. and BAM
Trading Services Inc. and Defendants have not responded by even date and time of this filing.
A copy of NFI’s proposed amicus brief is attached to this motion as Exhibit A.Page 2 INTEREST OF THE AMICUS CURIAENew Finance Institute (“NFI”) is a public benefit corporation with a dedicated mission to
discover financial truths and bring financial empowerment to the masses. NFI’s corporate website
can be found at: www.newfinanceinstitute.com. NFI publishes two blogs: Finance 2027 (“F27”)
and Full Court Press (“FCP”). F27 can be found at https://www.finance2027.com/ and, through its
publication, NFI aims to build consensus on financial definitions. FCP is available at
https://www.fullcourtpress.io/ and is dedicated to exploring the legal implications of financial
Definitions. NFI recently filed an amicus brief with the District Court for the Southern District of
New York in SEC v. Coinbase.
This case necessitates the application of legal principles to a unique set of facts which must
be situated within the appropriate historical and financial context. NFI has a strong interest in
building consensus on all financial definitions, most notably the word investing, which it sees as
a gating item toward prosperity and informed decision-making. This amicus brief, drawing on
financial expertise, hones in on the definition of investing, which NFI believes to be central to this
case. As such, NFI advocates for an evaluation of the boundaries of investor protection through
that lens. This holistic, multi-disciplinary approach is intended to offer the Court a novel and
distinct viewpoint.
More specifically, in this brief, NFI proposes a refinement of Howey based on fundamental
principles of finance (“Modified Howey”), an approach that provides a clear bridge from finance
No counsel for any party authored the attached brief in whole or in part, and no entity or
person, aside from the proposed amicus curiae and its counsel, made any monetary contribution
intended to fund the preparation or submission of the attached brief. As of the time of this
motion’s filing, the undersigned counsel and his law firm do not represent any of the parties
before this Court with respect to this case or any related matters.
1Page 3 to law. Under this proposed refinement, NFI rejects the popular, but ultimately incorrect view that
Howey is a conjunctive test, necessitating the satisfaction of all four prongs, at all times. Instead,
NFI contends that Howey is meant to be a flexible framework that becomes relevant depending on
both the type of asset and the circumstances under which the asset is sold.
That Howey is meant to be flexible is well-known; what is different under the proposed
framework is an explicit roadmap that maps that flexibility into the prongs themselves, i.e. for any
given transaction, the Modified Howey analysis starts by first asking: Which prongs are relevant?
In that regard, NFI views Howey as a set of toggles that the legal analyst chooses to “turn on or
off” before proceeding with the full analysis based on the economic realities of the transactions,
rather than applying the prongs conjunctively, all the time.
Critically, the Modified Howey approach is not an attempt to rewrite the judicial history;
in fact, it is largely consistent with Howey and its progeny. The approach preserves most decisions
that have been rendered; all it does is recognize the fact that the voluminous record of cases largely
reflects what was being transacted in markets at the time and under certain conditions: sales of
cash-flow-generating assets most of which can be characterized as primary market transactions.
The universe of the assets traded has expanded, resulting in a need to revisit Howey.
NFI believes that this novel approach, based on the economic realities of a new industry
and fundamental principles of finance might be of tremendous assistance to this Court not only in
properly resolving this case, but also in taking the first step toward revisiting Howey and assessing
how it should apply to an entirely new set of products in the marketplace.
ARGUMENT
“An amicus brief should normally be allowed when … the amicus has unique information
or perspective that can help the court beyond the help that the lawyers for the parties are able toPage 4 provide.” Citizens Against Cas. Gam., Erie Co. v. Kempthorne, 471 F. Supp. 2d 295 (W.D.N.Y.
2007) (internal citations omitted). “District courts have broad discretion to permit or deny an
appearance as amicus curiae in a case.” Automobile Club of N.Y., Inc. v. the Port Auth. of N.Y.
N.J., 11 Civ. 6746 (RJH) (S.D.N.Y. Nov. 23, 2011), citing Jamaica Hosp. Medical v. United
Health Group, 584 F. Supp. 2d 489, 497 (E.D.N.Y. 2008).
By starting the argumentation via basic principles of finance, and following those
principles all the way through toward a legal conclusion while also introducing a refinement
version of a critical test (Howey) in a way that mostly preserves the judicial past, NFI believes that
it has a unique perspective that will assist this Court beyond the help that the lawyers for the parties
are able to provide.
CONCLUSION
For these reasons, this Court should grant NFI’s motion for leave to file the amicus brief
attached hereto as Exhibit A.
Dated: November 14, Respectfully submitted,
/s/ Timothy C. Parlatore
Timothy C. Parlatore (NY0332)
Scott D. Brenner, Esq. (Admission Pending)
Counsel for Proposed Amicus Curiae
New Finance Institute
Parlatore Law Group, LLP
260 Madison Avenue, 17th Floor
New York, NY 10016
PDF Page 1
PlainSite Cover Page
PDF Page 2
Case 1:23-cv-01599-ABJ-ZMF Document 176 Filed 11/14/23 Page 1 of 4
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
v.
BINANCE HOLDINGS LIMITED, et al.,
Defendants.
)
)
)
)
)
)
)
)
)
)
)
)
)
)
CIVIL ACTION NO. 1:23-cv-01599-ABJ-ZMF
MOTION OF NEW FINANCE INSTITUTE FOR LEAVE TO FILE AN
AMICUS CURIAE BRIEF IN SUPPORT OF PLAINTIFF’S OPPOSITION
TO DEFENDANTS’ MOTIONS TO DISMISS
Pursuant to LCvR 7(o)(1), New Finance Institute, Inc. (“NFI”) respectfully requests leave
to file an amicus brief in support of plaintiff SEC’s opposition of motion to dismiss filed by
Defendants BAM Management US Holdings Inc. and BAM Trading Services Inc. (ECF No. 117),
and the motion to dismiss filed by Defendants Binance Holdings Limited and Changpeng Zhao
(ECF No. 118) (collectively, “Motions”).
Movant herein contacted all counsel for Plaintiff and Defendants via email on November
14, 2023.
Plaintiff, Securities and Exchange Commission, and Defendants, Binance Holdings
Limited and Changpeng Zhao, take no position on NFI’s request for leave and reserve their rights
to object upon filing accordingly. Defendants BAM Management US Holdings Inc. and BAM
Trading Services Inc. and Defendants have not responded by even date and time of this filing.
A copy of NFI’s proposed amicus brief is attached to this motion as Exhibit A.
PDF Page 3
Case 1:23-cv-01599-ABJ-ZMF Document 176 Filed 11/14/23 Page 2 of 4
INTEREST OF THE AMICUS CURIAE1
New Finance Institute (“NFI”) is a public benefit corporation with a dedicated mission to
discover financial truths and bring financial empowerment to the masses. NFI’s corporate website
can be found at: www.newfinanceinstitute.com. NFI publishes two blogs: Finance 2027 (“F27”)
and Full Court Press (“FCP”). F27 can be found at https://www.finance2027.com/ and, through its
publication, NFI aims to build consensus on financial definitions. FCP is available at
https://www.fullcourtpress.io/ and is dedicated to exploring the legal implications of financial
Definitions. NFI recently filed an amicus brief with the District Court for the Southern District of
New York in SEC v. Coinbase.
This case necessitates the application of legal principles to a unique set of facts which must
be situated within the appropriate historical and financial context. NFI has a strong interest in
building consensus on all financial definitions, most notably the word investing, which it sees as
a gating item toward prosperity and informed decision-making. This amicus brief, drawing on
financial expertise, hones in on the definition of investing, which NFI believes to be central to this
case. As such, NFI advocates for an evaluation of the boundaries of investor protection through
that lens. This holistic, multi-disciplinary approach is intended to offer the Court a novel and
distinct viewpoint.
More specifically, in this brief, NFI proposes a refinement of Howey based on fundamental
principles of finance (“Modified Howey”), an approach that provides a clear bridge from finance
No counsel for any party authored the attached brief in whole or in part, and no entity or
person, aside from the proposed amicus curiae and its counsel, made any monetary contribution
intended to fund the preparation or submission of the attached brief. As of the time of this
motion’s filing, the undersigned counsel and his law firm do not represent any of the parties
before this Court with respect to this case or any related matters.
1
PDF Page 4
Case 1:23-cv-01599-ABJ-ZMF Document 176 Filed 11/14/23 Page 3 of 4
to law. Under this proposed refinement, NFI rejects the popular, but ultimately incorrect view that
Howey is a conjunctive test, necessitating the satisfaction of all four prongs, at all times. Instead,
NFI contends that Howey is meant to be a flexible framework that becomes relevant depending on
both the type of asset and the circumstances under which the asset is sold.
That Howey is meant to be flexible is well-known; what is different under the proposed
framework is an explicit roadmap that maps that flexibility into the prongs themselves, i.e. for any
given transaction, the Modified Howey analysis starts by first asking: Which prongs are relevant?
In that regard, NFI views Howey as a set of toggles that the legal analyst chooses to “turn on or
off” before proceeding with the full analysis based on the economic realities of the transactions,
rather than applying the prongs conjunctively, all the time.
Critically, the Modified Howey approach is not an attempt to rewrite the judicial history;
in fact, it is largely consistent with Howey and its progeny. The approach preserves most decisions
that have been rendered; all it does is recognize the fact that the voluminous record of cases largely
reflects what was being transacted in markets at the time and under certain conditions: sales of
cash-flow-generating assets most of which can be characterized as primary market transactions.
The universe of the assets traded has expanded, resulting in a need to revisit Howey.
NFI believes that this novel approach, based on the economic realities of a new industry
and fundamental principles of finance might be of tremendous assistance to this Court not only in
properly resolving this case, but also in taking the first step toward revisiting Howey and assessing
how it should apply to an entirely new set of products in the marketplace.
ARGUMENT
“An amicus brief should normally be allowed when … the amicus has unique information
or perspective that can help the court beyond the help that the lawyers for the parties are able to
PDF Page 5
Case 1:23-cv-01599-ABJ-ZMF Document 176 Filed 11/14/23 Page 4 of 4
provide.” Citizens Against Cas. Gam., Erie Co. v. Kempthorne, 471 F. Supp. 2d 295 (W.D.N.Y.
2007) (internal citations omitted). “District courts have broad discretion to permit or deny an
appearance as amicus curiae in a case.” Automobile Club of N.Y., Inc. v. the Port Auth. of N.Y.
N.J., 11 Civ. 6746 (RJH) (S.D.N.Y. Nov. 23, 2011), citing Jamaica Hosp. Medical v. United
Health Group, 584 F. Supp. 2d 489, 497 (E.D.N.Y. 2008).
By starting the argumentation via basic principles of finance, and following those
principles all the way through toward a legal conclusion while also introducing a refinement
version of a critical test (Howey) in a way that mostly preserves the judicial past, NFI believes that
it has a unique perspective that will assist this Court beyond the help that the lawyers for the parties
are able to provide.
CONCLUSION
For these reasons, this Court should grant NFI’s motion for leave to file the amicus brief
attached hereto as Exhibit A.
Dated: November 14, 2023
Respectfully submitted,
/s/ Timothy C. Parlatore
Timothy C. Parlatore (NY0332)
Scott D. Brenner, Esq. (Admission Pending)
Counsel for Proposed Amicus Curiae
New Finance Institute
Parlatore Law Group, LLP
260 Madison Avenue, 17th Floor
New York, NY 10016
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