The Farmer's Cooperative of Arkansas and Oklahoma was an agricultural cooperative that had approximately 23,000 members

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The Farmer's Cooperative of Arkansas and Oklahoma
was an agricultural cooperative that had approximately 23,000
members . To raise money to support its general business operations
, sold promissory notes to investors that were payable on demand .
Co - Op offered the notes to both members and nonmembers ,
advertised the notes as an " investment program , and offered an
interest rate higher than that available on savings accounts at
financial institutions . More than 1,600 people purchased the notes
, worth a total of $ 10 million . Subsequently , Co - Op filed for
bankruptcy A class of holders of the notes filed suit against Ernst
& Young , a national firm of certified public accountants that
had audited Co - Op's financial statements , alleging that Ernst
& Young had violated Section of the Securities Exchange Act of
1934. Are the notes issued by Co - Op securities ? Reeves Ernst
& Young , 494 U.S. 56 , 110 S.Ct. 945 , 1990 U.S. Lexis 1051 (
Supreme Court of the United States ) 10(b)