                                                                           FILED
                           NOT FOR PUBLICATION
                                                                            FEB 24 2016
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS


                            FOR THE NINTH CIRCUIT


IGUAÇU, INC.,                                    No. 13-17544

              Plaintiff-Appellee,                D.C. No. 3:09-cv-00380-RS

 v.
                                                 MEMORANDUM*
ANTONIO CABRERA MANO FILHO,

              Defendant-Appellant.

IGUAÇU, INC.,                                    No. 14-17099

              Plaintiff-Appellee,                D.C. No. 3:09-cv-00380-RS

 v.

ANTONIO CABRERA MANO FILHO,

              Defendant-Appellant.


                  On Appeal from the United States District Court
                      for the Northern District of California
                    Richard Seeborg, District Judge, Presiding




        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                       Argued and Submitted February 10, 2016

Before:        HAWKINS and MURGUIA, Circuit Judges; and MURPHY,**
               District Judge.
      Plaintiff Iguaçu, Inc. sued Defendant Antonio Cabrera for unpaid

commissions on a contract. Cabrera argued that Iguaçu had acted as an

unregistered broker of securities, making the agreement void for illegality. The

district court, however, found that the interests sold by Cabrera were not securities

and that the economic reality of the transaction was the purchase of a participatory

interest in a joint venture, not the kind of passive investment that characterizes

securities. Cabrera appealed. We affirm.

      The interests purchased in the projects were quotas, or membership interests,

in limitadas, the Brazilian equivalent of an LLC. The transactions resulted in joint

ventures in which all members were actively engaged in management. Cabrera

admits that the transactions’ resulting interests were not securities, yet urges us to

consider the interests as securities during the time Iguaçu was seeking out

investment partners. But “[t]he Supreme Court has long instructed that securities

law places emphasis on economic reality and disregards form for substance.”

S.E.C. v. M&A W., Inc., 538 F.3d 1043, 1053 (9th Cir. 2008). Thus, we must view

transactions as a whole. Doing so, it is apparent that the transactions here are not of

          **
            The Honorable Stephen Joseph Murphy, III, United States District
Judge for the Eastern District of Michigan, sitting by designation.
the kind contemplated by the securities laws.

      The economic reality of the transactions was the investment in limitadas

with full expectation of shared management and operation thereof. The record

indicates that Iguaçu was not attempting to find mere buyers of shares of Cabrera’s

properties, but to introduce investors who could serve as active partners: partners

who at the very least would be obligated to arrange marketing of the venture’s

product.

      The securities laws were not intended to apply to those transactions. The

Supreme Court has consistently recognized that investments resulting in active

management are not to be considered securities and has defined an investment

contract “for purposes of the Securities Act [as] a contract, transaction or scheme

whereby a person invests his money in a common enterprise and is led to expect

profits solely from the efforts of the promoter or a third party.” S.E.C. v. W.J.

Howey Co., 328 U.S. 293, 298–99 (1946). Active management is contrasted with

pure “profit-seeking business venture” investment, when “investors provide the

capital and share in the earnings and profits; the promoters manage, control and

operate the enterprise.” Id. at 300.

      To hold Iguacu liable for brokering securities on the basis that, at one point,

the interests it helped to sell consisted of a corporation-analogue's stock, would

                                           3                                        13-17544
ignore the purpose, result and substance of the transaction – which was an active

investment in a joint venture.



                                   AFFIRMED.




                                         4                                   13-17544
