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CALIFORNIA CORPORATE & SECURITIES LAW

Governor Signs Finders Exemption Bill

Yesterday was the last day for Governor Brown to sign or veto bills passed by the Legislature on or before September 11 and in the his possession after that date.  Cal. Const. Art. IV, § 10(b)(1).  On Saturday, he signed into law a bill that will create a statutory exemption for “finders” from the securities broker-dealer registration requirement.  The bill, AB 667, was authored by Assemblymember Donald P. Wagner of Irvine and sponsored by by the Corporations Committee of the Business Law Section of the California State Bar.

It is important to recognize that the bill defines “finder” with particularity and not everyone who thinks she is a finder will meet the definition.  For example, the bill includes a list of eight “thou shalt nots” that would disqualify a would-be finder from meeting the statutory definition.  The exemption is also conditioned on filing of an initial and annual notices with the Commissioner of Business Oversight and the payment of a fee.  A finder must also obtain and retain the informed, written consent of each person introduced or referred by the finder to an issuer.

If Today Is A State Holiday, Why Are State Offices Open?

California Government Code Section 6700 designates the second Monday in October “known as ‘Columbus Day'” as a state holiday.  However, state offices do not close on Columbus Day and state employees don’t get the day off unless they specify it as their own personal holiday.  Cal. Gov’t Code § 19853.

Columbus Day’s status nonetheless means that it is not a “business day” as defined in the Corporate Securities Law of 1968.  Corporations Code Section 25003.5 defines “business days” as “all days other than every Saturday, every Sunday, and such other days as are specified or provided for as holidays in the Government Code of the State of California”.  The result therefore is that state offices are open for business even though today is not a “business day”.

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