The Financial Industry Regulatory Authority, more commonly known as FINRA, has adopted a Code of Arbitration for Customer Disputes (FINRA has a separate code for industry disputes). Under FINRA’s Customer Code, a claim by or against an inactive member is ineligible for arbitration unless, after the claim arises, the customer agrees in writing to arbitrate. Rule 12202. In other words, a pre-claim Read more...
Two Very Good Reasons To Visit The Department’s Website
When I joined the Department of Corporations, it had no website. I remember reviewing possible designs for a site. Now, it seems hard to imagine that there was a time when state agencies didn’t have websites. Today, the Department’s website is a good source of information about enforcement actions, licensing requirements and procedures, as well as the laws and regulations Read more...
Sealing A Contract May Mean Nothing Or 20 Years!
The California Corporations Code endows corporations with certain rights, including the right to “adopt, use and alter” a seal. Cal. Corp. Code § 207(a). The Corporations Code does not define a “seal” but the Code of Civil Procedure does. Under Section 1930, a seal “is a particular sign, made to attest, in the most formal manner, the execution of an instrument.” Read more...
Ever Wonder What Money Is? California Has Some Answers And I Have Some Questions
Yesterday’s post discussed virtual currencies (e.g., Bitcoin) and the General Corporation’s law prohibition on issuing or putting into circulation money. But what exactly is money? The General Corporation Law has no answer. I’m aware of at least three different California statutes that define “money”. Government Sanction Seems To Be The Sine Qua Non Of Money First, we have the California Uniform Commercial Code which defines “money” in Read more...
Bitcoin And The Corporations Code
I’ve been seeing an increasing number of references to Bitcoin and other forms of virtual or crypto currencies in the news. For example, Jeffrey Sparshott and Robin Sidel of the Wall Street Journal reported last week that the Department of Homeland Security had frozen the account “tied to the largest Bitcoin exchange”. In March, the Financial Crimes Enforcement Network (“FinCEN”) issued this guidance Read more...
If You’re Relying On The Signature Of Two Officers, You May Want To Think Again
It is widely assumed that if a contract, note or other instrument is signed by a corporation’s president and its secretary, it will not be invalidated as to the corporation by any lack of authority of the signing officers. After all, Section 313 of the California Corporations Code provides: Subject to the provisions of subdivision (a) of Section 208, any note, Read more...
Court Explicates Scope of Usury Exemption For Real Estate Brokers
Artistotle didn’t think much of the idea of paying interest: εὐλογώτατα μισεῖται ἡ ὀβολοστατικὴ διὰ τὸ ἀπ᾽ αὐτοῦ τοῦ νομίσματος εἶναι τὴν κτῆσιν καὶ οὐκ ἐφ᾽ ὅπερ ἐπορίσθη. μεταβολῆς γὰρ ἐγένετο χάριν, ὁ δὲ τόκος αὐτὸ ποιεῖ πλέον （ὅθεν καὶ τοὔνομα τοῦτ᾽ εἴληφεν: ὅμοια γὰρ τὰ τικτόμενα τοῖς γεννῶσιν αὐτά ἐστιν, ὁ δὲ τόκος γίνεται νόμισμα ἐκ νομίσματος: ὥστε καὶ μάλιστα παρὰ Read more...
Supreme Court To Decide If It Will Decide Whether Section 16 Plaintiff Has Constitutional Standing
No Harm, No Foul The late Lakers broadcaster Chick Hearn was known for coining or popularizing numerous basketball expressions, including “air ball” and ”no harm, no foul”. Now, the U.S. Supreme Court may soon decide whether the principle of “no harm, no foul” applies to Section 16, the other insider trading statute. Do Section 16 Plaintiffs Suffer Injury In Fact? In 2009/2010, Read more...
But Wait, California May Require Even More In Annual Reports To Shareholders
Yesterday’s blog discussed California’s requirement that many domestic and foreign corporations send financial statements to their shareholders. If a corporation has 100 or more holders of record (determined in accordance with Section 605), then the annual report must also provide a brief description of the following: Any transaction during the previous fiscal year involving an amount in excess of $40,000 to which the Read more...
California Requires Many Foreign Corporations To Send Annual Financial Statements To Shareholders
California is a net exporter of corporate charters, but it remains home to many corporations. As a result, the California Corporations Code has a preternatural concern with foreign corporations. One example is Section 1501(a) which requires the board to cause an annual report to be sent to shareholders. This report must include a balance sheet as of year end and Read more...
