Governor Signs Capital Access Company Bill
Yesterday, Governor Arnold Schwarzenegger signed into law SB 1155 (Dutton). This bill amends California’s unique Capital Access Company Law. That law was enacted to take advantage of the exemption set forth in Section 6(a)(5)(A) of the Investment Company Act of 1940. Although the California Capital Access Company Law, Cal. Corp. Code § 28000 et seq., has been on the books for a decade, Read more...
The Dodd-Frank Act’s Exclusion of the “Chief School of Human Virtues”
As has been discussed in earlier posts, Section 413(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires the exclusion of the value of an investor’s primary residence for purposes of the net worth determination under Securities Act Rules 215 and 501(a)(5). The Securities and Exchange Commission has provided the public with an opportunity to comment on rule changes even before it proposes them. Read more...
LLC Contractor Bill Sent to Governor
On September 16, I wrote that SB 392 (Florez) had been “held at desk” pursuant to Joint Rule 57. SB 392 would allow an LLC to be licensed as a contractor. Cal. Const. Art. IV, § 10(b)(2) provides that any bill passed before September 1 (SB 392 was passed on August 30) and in the possession of the Governor on or Read more...
Buying in Bulk in California
“Bulk” is a word that comes into English from the Old Norse language. It refers to a pile of goods – presumably at the bottom of a Viking ship. With the growth of commerce, creditors became concerned that merchants would acquire an inventory – a pile of goods – on credit, sell the bulk, take off, and leave the creditors Read more...
Don’t Be a Dummy – Measuring Shareholder Voting Power
John F. Banzhaf III is a law professor who in the 1960s became interested in voting and voting power. See Weighted Voting Doesn’t Work: A Mathematical Analysis, 19 Rutgers Law Review 317 (1965). In ensuing years, Professor Banzhaf has attracted controversy for his anti-smoking and anti-obesity activism. Determining voting power is key to knowing where the balance of power lies. Read more...
California Is The Largest Issuer In The United States
On September 21, 2010, the Securities and Exchange Commission held its first in a series of hearings concerning the municipal securities markets. California Treasurer Bill Lockyer submitted these written remarks. In these remarks, the Treasurer mentions that last year California was “the largest issuer in the nation including corporate issuers” (with certain footnoted exceptions). In August, the SEC charged the State Read more...
There Is No Alter Ego Liability When The Creditor Knows There Is No Corn In the Husk
Ok, I admit Fusion Capital Fund II, LLC v. Ham, 2010 U.S. App. LEXIS 15962 (Aug. 2, 2010) does not deal with California law. The case caught my eye because it isn’t all that often that you see an opinion interpreting Nevada corporate law written by Chief Judge Frank Easterbrook and joined by Judges Richard A. Posner and Michael S. Kanne. Moreover, Nevada’s private corporation Read more...
Senior-Specific Specifications Can Spell Trouble Under the CSL
Recently, the Securities and Exchange Commission announced that it had charged an investment adviser in Colorado with fraudulently recommending hedge funds to older investors. In California, we have a statute, Corporations Code Section 25234.5, that specifically prohibits broker-dealers and investment advisers, or their respective agents or representatives, from using a senior specific professional designation in the offer or sale of Read more...
Victims of Corporate Fraud Fund
In the waning days of the 2001-2002 legislative session, then Assemblymember Kevin Shelley gutted and amended AB 55. As introduced, AB 55 would have amended the Elections Code. Instead, AB 55 became the vehicle for the enactment of the deeply flawed California Corporate Disclosure Act. In the ensuing years, most practitioners and their clients have focused disclosure requirements of AB Read more...
Supreme Court Set To Decide Arian Controversy In Janus
The U.S. Supreme Court has scheduled oral arguments in Janus Capital Group, Inc.v. First Derivative Traders for December 7, 2010. The case concerns whether: (1) a service provider can be held primarily liable for participating in an issuer’s misstatements; and (2) whether a service provide can be held primarily liable for statements not directly and contemporaneously attributed to that service Read more...
