California’s Ban On Loans To Directors And Officers

California banned loans to directors and officers decades before Congress thought of doing so as part of the Sarbanes-Oxley Act of 2002.  Current Corporations Code Section 315 prohibits corporations from making loans of money or property to, or guaranteeing the obligations of, any director or officer of the corporation or its parent.  However, the ban does not apply:

Legislature (Re)Enacts A Maximum De Minimis Finance Lenders Law Exemption

The California Finance Lenders Law defines a “finance lender” as anyone that is engaged in the business of making consumer loans or making commercial loans.  Cal. Fin. Code § 22009.  Knowing the definition of “finance lender” is important because California imposes a license requirement on anyone engaged in the business of a finance lender. Cal. Fin.

SEC Overlooks Nevada’s Transfer Agent Licensing Laws

Transfer agents provide a number of crucial services, primarily for publicly traded companies.  Among other responsibilities, they maintain ownership records, record security transfers, issue and cancel certificates and distribute dividends.  Since 1975, persons performing transfer agent services for public companies must be licensed by the “appropriate regulatory authority” (“ARA”) pursuant to Section 17A(c) of the

Does California Corporate Law Really Govern 20% of All Public Companies?

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On Tuesday, the Deal Professor (aka Berkeley Law School Professor Steven Davidoff Solomon) wrote an interesting column for The New York Times’ Dealb%k.  According to the Professor, California is the headquarters state for 20% of all companies with securities listed on the New York and Nasdaq stock exchanges.  He finds this number particularly impressive in light

Can Limited Partnerships Have Officers?

Can limited partnerships have officers?  In many cases, individuals with officer titles will actually be officers of the general partner.  My question is whether a limited partnership itself may have officers. Two provisions of Delaware’s Revised Uniform Limited Partnership Act contemplates that the answer is “yes”.  Section 17-403(c) provides: Unless otherwise provided in the partnership agreement,

What The Public Utilities Code, Toilets And A Porphyrogenetus Emperor Have In Common

Mobile West LLC v. City & County of San Francisco, 2016 Cal. App. LEXIS 769 (1st Dist. Sept. 15, 2016) is not the kind of case that I typically write about in this blog.  After all, it has nothing to do with corporate, securities or limited liability company law.  Nonetheless, I found the case intriguing

Should Tweener Corporations Include This Provision In Their Equity Compensation Plans?

I have previously commented on the phenomenon of what I call the “tweener” corporation.  See Will The Rise Of Tweener Corporations Increase Focus On California’s Annual Report Statute?  These are corporations that are not quite private and not quite publicly traded.  One of the advantages of not being subject to the reporting requirements of the Securities

Court Rules Coequal Stockholders Owe Fiduciary Duties To Each Other

Stockholders in closely held corporations often operate their companies as if they were partnerships.  Does that mean that the stockholders, like partners, owe fiduciary duties to each other? In Jones v. H. F. Ahmanson & Co., 1 Cal. 3d 93 (1969), the California Supreme Court famously held: Majority shareholders may not use their power to

Was This “Whiz Kid” An Investment Adviser?

Earlier this week, the Securities and Exchange Commission announced that a self-styled “stock trading whiz kid” and his Los Angeles, California company have agreed to pay $1.5 million to settle a complaint for violations of Rule 10b-5.  There is an odd disconnect between the SEC’s press release and its complaint.  The press release is headlined “stock newsletter fraud” and repeatedly refers to the

NASAA Releases 2015 Enforcement Report

State securities regulators serve an important local enforcement function.  In fact, state securities regulation precedes federal regulation by more than two decades.  The North American Securities Administrators Association is an association of state, provincial and territorial securities regulators from the 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico, Canada, and Mexico.