California Broker-Dealer Safe Harbor Rule Approved

In People v. Cole, 156 Cal. App. 4th 452 (2007), a California Court of Appeal appeared to reach the surprising conclusion that corporate officers and directors of issuers are required to be licensed as broker-dealers unless they receive a commission for the sale of securities!

As discussed in this post, Commissioner Preston DuFauchard responded to the Cole decision by proposing the adoption of a safe harbor rule that largely mirrors the SEC’s safe harbor rule (Rule 3a4-1).  Yesterday, the California Office of Administrative Law approved the Commissioner’s proposed rule (10 CCR 260.004.1).  The rule will officially take effect on June 3, 2011.

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