Charles Edwards was the chairman, chief executive officer, and sole shareholder of ETS Payphones, Inc. ETS sold payphones packaged with a site lease, a five- year leaseback and management agreement, and a buyback agreement. The purchase price for the payphone packages was approximately $ 7,000. Under the leaseback and management agreement, purchasers received $ 82 per month, a 14 percent annual return. Purchasers were not involved in the day- to- day operation of the payphones they owned. ETS selected the site for the phones, installed the equipment, arranged for connection and long- distance service, collected coin revenues, and maintained and repaired the phones. The payphones did not generate enough revenue for ETS to make the payments required by the leaseback agreements, so the company depended on funds from new investors to meet its obligations. In September 2000, ETS filed for bankruptcy. The SEC brought suit against Edwards and ETS for failure to register securities prior to sale. The district court concluded the arrangement was an “investment contract” subject to the securities laws. The Court of Appeals reversed the lower court. Which court is correct? Did the sale of securities take place? [SEC v. Edwards, 540 U. S. 389 (2004).]