common to a group of investors (horizontal commonality).” Hocking, 885 F.2d at 1455. A plaintiff may show vertical commonality if “the fortunes of the investors are linked with those of the promoters.” S.E.C. v. R.G. Reynolds Enters., Inc., 952 F.2d 1125, 1130 (9th Cir.1991) (quotation omitted); see also S.E.C. v. Eurobond Exch., Ltd., 13 F.3d 1334, 1338-39 (9th Cir.1994) (stating “a common enterprise exists if a direct correlation has been established between success or failure of [the promoter’s] efforts and success or failure of the investment”) (quotation omitted). “One indicator of vertical commonality, though by no means the only indicator, is an arrangement to share profits on a percentage basis between the investor and the seller or promoter.” R.G. Reynolds, 952 F.2d at 1130-31 (<HOLDING>). Viewing the evidence in the light most
holding that where promoters management fee was based on a percentage of the profits promoters profit was tied to investors profits and thus vertical commonality existed holding a personal profit exclusion applicable to an insured corporation where the purpose of the exclusion was to exclude coverage when the insured received profits to which the insured was not legally entitled holding that lost profits were covered where the insureds product a motor used in a treadmill was defective and caused lost profits on the sale of the treadmills holding exclusion inapplicable because under the facts alleged in the underlying suit the insured could receive personal profits and be legally entitled to retain them and distinguishing cases where there was sufficient evidence in the underlying complaint to show the profits received were illegal or undeserved within the meaning of the exclusion holding past profits coupled with other facts and circumstances may establish lost profits