I’ve recently completed my editing of the annual update to Marsh & Volk’s treatise, Practice Under the California Securities Laws. One source of frustration has been to account for and explain the numerous technical errors in the securities laws. When I refer to “errors”, I don’t mean policy decisions with which I disagree. I mean the much more mundane mistakes of numbering and reference.
For example, Section 3(a)(2) of the Securities Act of 1933 includes multiple references the Internal Revenue Code of 1954 even though Congress renamed that Code nearly 30 years ago. Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095. The same mistake can be found in Section 3(a)(5) of the Securities Act. Rules 132 and 180 under the Securities Act are also frozen in the 1950s.
Section 18 of the Securities Act is rife with problems. For example, there are subparagraphs (D) and (F), but no subparagraph (E). Subsection 18(b)(1)(A) continues to refer to the National Market System of the Nasdaq Stock Market even though almost a decade has passed since Nasdaq became a stock exchange. Subsection 18(b)(4) is also terribly inconsistent. Subparagraphs (A), (B) and (C) continue to refer to Sections 4(1), 4(3), 4(4) and 4(6) of the Securities Act even though those sections are now Sections 4(a)(1), 4(a)(3), 4(a)(4) and 4(a)(6). At the same time, subparagraph (G) refers to Section 4(a)(7).