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CALIFORNIA CORPORATE & SECURITIES LAW

Does ISS’ Voting Recommendations Reflect Analysis Or Consensus?

I always appreciate comments from readers of this blog.  One reader responded to yesterday’s post concerning ISS opposition to classified boards: “You seem to be under the impression that ISS comes up with its guidelines through academic research.  Although that CAN come into play, it is much more directly shaped by the policies of its customers.”…

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Is ISS A Board Declassification Denier?

Institutional Shareholder Services (aka ISS) recently published its 2018 Americas Proxy Voting Guidelines Update.  Among other changes, ISS will now recommend a vote against or withhold from the entire board of directors (except new nominees, who will be considered case-by-case) if the company has opted into, or failed to opt out of, state laws requiring a classified…

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Is Every Agent A Fiduciary?

In common parlance, a fiduciary is someone you can trust.  The word itself is related to the Latin word, fidere, meaning to trust.  We name our dogs “Fido” because dogs are trustworthy companions.  For example, a dog named Hachiko (忠犬ハチ公) faithfully returned every day for nine years to Shibuya Station in Tokyo to greet his master…

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Shareholders Sues Officer Of Delaware Corporation In California State Court, Should Texas Law Apply?

Yesterday’s post discussed one aspect of the California Court of Appeal’s opinion in Central Laborers’ Pension Fund v. McAfee, Inc., 2017 Cal. App. LEXIS 1008.  The case arose from Intel Corporation’s acquisition of McAfee, Inc., a Delaware corporation.  Among other things, the plaintiff complained that David DeWalt, McAfee’s erstwhile president and CEO, in pursuit of his…

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Court Of Appeal Finds No Right To Jury In Shareholder Class Action

In several blog posts, I have commented on the right to a jury trial under California law.  This may seem like an inapposite subject for a blog devoted to corporate and securities law issues.  Nonetheless, I have prognosticated that the right to a jury trial may be a basis for challenging a Delaware choice of law bylaw. …

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California Securities Law Claims Founder On Personal Jurisdiction

Establishing personal jurisdiction may seem mundane, but without it a plaintiff may soon find itself out of court, as did the plaintiff in Marshall v. Galvanoni, 2017 U.S. Dist. LEXIS 185530. In Marshall, the plaintiff sued a half dozen companies and four individuals over failed investments.  Among other things, the plaintiff alleged violations of California…

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Judge Rules Internal Affairs Doctrine Governs California Insider Trading Statute

As I have mentioned on numerous occasions, California has its own insider trading statute – California Corporations Code Section 25402.  The statute is included in the California Corporate Securities Law of 1968.  In general, the jurisdiction of organization of an issuer is irrelevant to the application of the CSL.  Thus, in most instances, the operative issue will…

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Do You Have To Be Old To Be A Veteran?

On Saturday, the country honored its veterans.  November 11 was originally designated as “Armistice Day” in recognition of the date on which fighting in the First World War ended.  It became a legal holiday in 1938, only a few years before the United States’ entry into the Second World War in 1941.  52 Stat. 351;…

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Judge Alex Kozinski On Debt Versus Equity

Judge Alex Kozinski succinctly frames the debt versus equity battle in this opinion issued yesterday: It’s a timeless and tiresome question of American tax law: Is a transaction debt or equity?  The extremes answer themselves.  The classic equity investment entitles the investor to participate in management and share the (potentially limitless) profits—but only after those…

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More On Disclosure Under SEC Rule 701(e)

As mentioned yesterday, Corporation Finance (often referred to as “Corp Fin”) recently issued a Compliance & Disclosure Interpretation with respect to the disclosure delivery requirements under Rule 701(e).  I find myself befuddled by the following statement in the C&DI: “Once access to the required information has been granted, however, the medium used to communicate the…

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