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CALIFORNIA CORPORATE & SECURITIES LAW

Officers And The Business Judgment Rule

Last weekend I attended a symposium at the UCLA School of Law entitled “Can Delaware Be Dethroned? Evaluating Delaware’s Dominance of Corporate Law”.  The event, organized by ever erudite Professor Stephen Bainbridge, featured presentations by leading scholars and practitioners from around the country.  I was therefore surprised when the discussion turned to whether Delaware applies the business…

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Court Finds Promissory Notes Are Not Securities

Yesterday’s post concerned the Court of Appeal’s decision in People v. Black, 2017 Cal. App. LEXIS 130 (Cal. App. 6th Dist. Feb. 16, 2017).  The case involved the criminal prosecution of an individual for making false statements in connection with the offer and sale of a security in violation of Corporations Code Section 25401.  The trial…

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Silver Hills Doesn’t Mute Howey

Anyone who has studied securities regulation since 1946 should be familiar with the U.S. Supreme Court’s definition of a “security” as enunciated by Justice Frank Murphy in S.E.C. v. Howey Co., 328 U.S. 293 (1946).  That test asks “whether the scheme involves an investment of money in a common enterprise with profits to come solely from the…

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What Do You Know? Bill Proposes To Eliminate Scienter

Corporations Code Section 25401 is California’s basic securities antifraud statute: It is unlawful for any person to offer or sell a security in this state, or to buy or offer to buy a security in this state, by means of any written or oral communication that includes an untrue statement of a material fact or…

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Is California “The Biggest Loser”?

I am very excited to be moderating a panel discussion this weekend at a symposium entitled Can Delaware Be Dethroned? Evaluating Delaware’s Dominance Of Corporate Law.  The symposium is being presented by the Lowell Milken Institute for Business Law and Policy at UCLA’s School of Law.  My panel consists of distinguished legal scholars from around the country: Michal Barzuza…

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Bill Introduced To Require Registration Of Finders Under The California Finance Lenders Law

The California Finance Lenders Law, Financial Code § 22000 et seq., currently requires licensing of finance lenders and brokers.  A finance lender is defined as any person who is engaged in the business of making consumer loans or making commercial loans. Cal. Fin. Code § 22009.  The business of making consumer loans or commercial loans may include…

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Investment Advisers And Broker-Dealers Face Scant Likelihood Of California Examinations

The California Department of Business Oversight recently issued a report on its Broker-Dealer/Investment Adviser Program.  This report was required by the Budget Act of 2014. Although short, the report provides some interesting data about California’s oversight of investment advisers and broker-dealers. In the last five years, the number of investment adviser firms subject to examination by the BDO has increased…

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Getting To The Point On Director Elections

Last week in The Mentor Blog, Broc Romanek mentioned a blog posting of mine from September 2015: Was This Director Duly Elected Or Appointed?  My post was concerned Intelligent Digital Systems, LLC v. Beazley Ins. Co., Inc., 2015 U.S. Dist. LEXIS 82742 (June 23, 2015).  Briefly, an insurer claimed that the director had been duly elected or appointed and this triggered a…

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Can The Legislature Hire Its Own Lawyer?

In early January, California Senate President pro Tempore Kevin de León and Assembly Speaker Anthony Rendon jointly announced that the California Legislature had hired outside legal counsel to advise on potential legal challenges with the incoming administration of Donald Trump.  I found this interesting as I could not recall a prior circumstance in which the legislature had ever…

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Homographic Cases Indeed!

Homographs are words that share the same spelling but have different meanings.  One such word that is very familiar to lawyers is the word “case”.  Lawyer’s try cases, shelve books in cases, and write in upper case and lower case letters.  How can one word share the same spelling and pronunciation and yet have such different…

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