What The Legislature Doesn’t Know About Bees Could Fill A Blog

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As a once and future beekeeper, I’m bemused by the California legislature’s inept efforts to legislate apiculture.  Section 29414 of the California Food & Agricultural Code, for example, defines “honeybees” as ” honey-producing insects of the genus Apis mellifica”.  There are at least two mistakes in this short definition. Keep Forests Clean, Often Fires Get Started First, Apis

California’s Other Investment Adviser Law

California’s Corporate Securities Law of 1968 defines and provides for the comprehensive regulation of most, but not all, investment advisers.  Some investment advisers are subject to an entirely different law found in the California Civil Code – Section 3372. Section 3372 applies to any person “engaged in the business of advising others for compensation as to the

Assembly Committee Seeks To Fix Securities Fraud Statute

Readers of this blog will be familiar with my criticism of the 2013 amendment of California’s basic securities fraud statute, Corporations Code Section 25401.  See California Creates Complete Chaos By Rewriting Anti-Fraud Statute, But “We Are Against Fraud Aren’t We?”, Die Verwandlung: How The Legislature Likely Raised The Bar On Securities Fraud Actions, When California Copied Rule

DBO Defeats Preliminary Injunction Files Suit Against Prorater

Last month, I wrote about Judge Lucy Koh’s decision not to preliminarily enjoin the Department of Business Oversight’s investigation of Nationwide Biweekly Administration, Inc. for unlicensed activity under California’s Check Sellers, Bill Payers and Proraters Law.  Cal. Fin. Code § 12000 et seq.   Judge Koh concluded that the law’s requirement that licensees be California corporations did not violate the Commerce

Shares “Of” Or “In” The Corporation?

A colleague recently asked: “Which is correct – shares in the corporation or shares of the corporation?”  There are two approaches to answering the question – prescriptive and descriptive. I couldn’t find any authoritative prescriptive answer.  It seems to me that the question turns on the meaning of the prepositions “in” and “of”. The preposition

SEC Is Sued Again For Doing Nothing

Yesterday, Broc Romanek wrote about a lawsuit filed earlier this week against the Securities and Exchange Commission due to its failure to respond to a petition asking the Commission to adopt political spending disclosure requirements. But must the Commission act on the petitions that are submitted to it?  Rule 192 of the Commission’s Rules of

SB 75 May Prove To Be Delaware’s Seven Sisters

A century ago, New Jersey was the state in which to incorporate.  Long before former Iraqi President popularized the expression “Mother of Battles” (“Um El-Ma’arek“), the famed legal scholar Adolph A. Berle, Jr. bestowed the title of “mother of all corporations” on the State of New Jersey.  Berle, Historical Inheritance of American Corporations, Lecture given before The

CAFA Filings Spike in 2013

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  On February 18 2005, Congress enacted the Class Action Fairness Act (CAFA), P.L. No. 109-2 (28 U.S.C. §§ 1332(d), 1453, and 1711 – 1715). In enacting the CAFA, Congress sought to protect consumers and investors from settlements in which plaintiffs’ attorneys received significant fees but class members received little or even less. In one

Here’s One Way To Recover Attorneys’ Fees Without Adopting A Fee Shifting Bylaw

With the ongoing hullabaloo concerning the legislative demise of fee shifting bylaw provisions under Delaware law, little attention has been paid to California law.  More importantly, no one seems to have noticed that California law already provides a mechanism for the collection of attorneys’ fees and other costs by the prevailing corporation or defendant in a derivative suit

It’s Time To Put A Stop To Fee-Shifting (But Not In the Way You Might Think)

The problem with “fee-shifting bylaws” starts with the name.  A better name might be “anti fee-shifting bylaws” because they end the fee shifting that otherwise applies.  Without fee-shifting bylaws, plaintiffs’ attorneys are encouraged to bet with the stockholders’ money.  This is, of course, unfair to the stockholders.  Society also suffers because the current fee-shifting regime