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Shareholder Inspection Rights – Another Nevada “Advantage”?

Thanks to Kevin LaCroix’s The D&O Diary, I was alerted to a recent article by Boris Feldman, a member of Wilson Sonsini Goodrich & Rosati, P.C., in Palo Alto, California discussing developments in class action and other shareholder litigation.  Among other things, Boris notes that litigation under Delaware’s stockholder inspection statute, Section 220, has “caught fire”…

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Do You Have The Correct Authorized Number Of Directors?

I frequently come across corporations with the wrong number of authorized directors.  California, unlike other states, has some very precise rules and these frequently seem to be missed. The Bylaws of many California corporations establish a minimum and maximum number of directors and permit the board to fix the exact number within that range.  For…

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Punitive Bill Proposes Giant Step Backwards On Capital Formation

The California Corporate Securities Law of 1968 forbids the offer and sale in this state of any security in an issuer transaction unless the sale has been qualified or the security or transaction is exempt or not subject to qualification.  Cal. Corp. Code Section 25110.  This important principle is the same whether it is the…

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Bill Seeks To Mandate Corporate Political Disclosures

The fallout from the U.S. Supreme Court’s decision in Citizens United v. Federal Election Com’n, 130 S. Ct. 876 (2010) continues.  Earlier this week, California State Senator Noreen Evans introduced a bill, SB 982, to require corporations to issue a report on planned political spending as well as expenditures for the previous fiscal year.  The…

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There’s Something About Section 800 And ISS Adds Panelist

What’s So Different About Section 800? California Corporations Code Section 800 governs derivative lawsuits.  Yesterday, I wrote about the fact that the California legislature has made Section 800 expressly applicable to foreign corporations (as defined in Section 171).   Is this an academic point or can it matter? One key difference may be that Section 800(c)…

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Choice Of Law And Derivative Suits

The California Corporations Code carefully defines the the terms “corporation” (Section 162), “domestic corporation” (Section 167), “foreign corporation” (Section 171); and “foreign association” (Section 170).  For example, when the legislature provided in Section 1500 that “[e]ach corporation shall keep adequate and correct books and records . . . “, the legislature imposed a mandatory obligation…

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Stop SOPA? Hey, It’s Already The Law!

The Stop Online Piracy Act (SOPA), H.R. 3261, has been attracting a lot of attention lately.  However, here in California, we’ve been living under the SOPA for better than half a century. The California SOPA is the Securities Owners Protection Act (or Law) which can be found at Corporations Code Section 27000 et seq.  The law is generally intended to…

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Has ISS Moved From Advice To Advocacy?

Last November, I joined Professor Stephen Bainbridge (UCLA Law School) and James Copland (Director, Center for Legal Policy at the Manhattan Institute) in submitting this comment letter opposing ISS’ proposal to change its case-by-case approach to stockholder proposals with respect to disclosure of corporate political spending.  Much like Captain Louis Renault, I was “shocked, shocked” when ISS ignored our…

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Enforcing Form D Filings – A Misguided State Policy

The American Bar Association’s Committee on State Regulation of Securities publishes The Blue Sky Bugle, a newsletter for lawyers who deal with the state regulation of securities.  In a column for the December issue, Alan Parness of Cadwalader, Wickersham & Taft LLP wrote about the enforcement report issued last October by the North American Securities…

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