When confronting tough questions concerning securities, try to process the information like this:
1. Is the INVESTMENT of money a SECURITY?
If so, it is subject to the state's anti-fraud authority.
2. Is the security exempt?
3. Is the transaction exempt?
If no on both questions--somebody forgot to get the thing registered!
Okay, let's apply that little list. An indexed annuity is outside the scope of the SECURITIES act, so it's not even subject to the Uniform Securities Act's anti-fraud statutes. On the other hand, a church bond is merely an exempt SECURITY. That means it escapes registration fees and paperwork but is still subject to the Uniform Securities Act's anti-fraud statutes. Finally, a private placement involves a NON-exempt security being offered/sold in a special way. The people connected to the offer, sale, or purchase of this security are all subject to the state's anti-fraud authority.
Now you see why the Howey Decision was so important--if the respondent's lawyers can convince the hearing officer or judge that the investment was not a security, the client walks. Right? If it's not a security . . . it's not a security. If it IS a security it IS subject to anti-fraud rules AND will either need to be registered or exempted from registration.