Changes In California Business Entity Filings Take Effect Next Week
The California Secretary of State has given notice of the following changes to business entity filings: All formation/registration documents must include the business entity street address and mailing address. All foreign corporation and foreign limited liability company registration documents must include the street address of the principal business office address in California, if one exists. All documents listing an individual Read more...
Phishing Scam Uses California Victims of Corporate Fraud Compensation Fund As Lure
Earlier this month, the California Secretary of State warned of yet another phishing scam. Criminals typically phish by associating themselves with legitimate businesses. Their goal is to obtain personal information that can be used to steal your identity. This particular scam mentions the California Victims of Corporate Fraud Compensation Fund, a real fund that is administered by the Secretary of State. See Read more...
In What Branch Of Government Are State Agencies?
Article III, Section 3 of the California Constitution declares that the powers of state government are legislative, executive and judicial. Section 3 then explicitly provides that “Persons charged with the exercise of one power may not exercise either of the others except as permitted by this Constitution.” This is what the Constitution says, but is it reality when it comes Read more...
Does A Lawyer Who Files A Derivative Action Have An Attorney-Client Relationship With The Corporation?
Because the California Corporations Code requires that the business and affairs of a corporation be managed by or under the direction of its board of directors, any decision of whether a corporation should bring suit on behalf of the corporation is ultimately vested in the corporation’s board. Cal. Corp. Code § 300(a). Derivative actions are an exception to this general principle. If Read more...
Does The Victims Of Corporate Fraud Compensation Fund Deny Due Process?
In notorious defiance of the California Constitution, the legislature in 2002 established the Victims of Corporate Fraud Compensation Fund. See Victims of Corporate Fraud. The purpose of the fund is to provide ”restitution to the victims of a corporate fraud”. Several years later, Sacramento Bee reporter Dan Morain wrote a devastating article on the fund: Fraud Victims Fund is a Travesty. He ended Read more...
Facebook Fairness Hearing Back In The News
Last August, the Department of Corporations approved the acquisition of Instagram, Inc. by Facebook, Inc. following a fairness hearing. See DOC Calls It Fair. According to this Los Angeles Times story by Salvador Rodriguez, Facebook officially closed the acquisition a few days later. Although I would have expected that to have been the end of the matter, the Facebook fairness hearing leaped into Read more...
Court Rules Law Firm That Drafted Documents Was Not A Seller Of Securities
Section 25400(d) of the California Corporations Code declares it unlawful for any broker-dealer or “other person selling or offering for sale” to make a false or misleading statement for the purpose of inducing the purchase or sale of a security if that person knew or had reason to know that the statement was false or misleading. Corporations Code Section 25500, Read more...
Court Of Appeal Finds Error In Refusal To Give “Business Judgment” Instruction To Jury
Justice Russell C. Ostrander: “judges are not business experts.” Dodge v. Ford Motor Co., 204 Mich. 459, 508 (1919) A few days ago, I wrote about U.S. District Court Judge Dale S. Fischer’s refusal to extend the business judgment rule to officers. See Is FDIC v. Van Dellen California’s Smith v. Van Gorkom? Judge Fischer’s decision ultimately led to a nearly Read more...
Nevada Secretary of State Cites Three Criminal Convictions As Warning To Crowdfunders
The Nevada Securities Law (Chapter 90 of Nevada Revised Statutes) is administered and enforced by the Securities Division of the Nevada Secretary of State. Last week, Nevada Secretary of State Ross Miller issued this press release warning investors that three separate criminal convictions in Nevada “point to potential trend in illegal crowdfunding”. According to the press release, “[i]n each case it was Read more...
