A Criminal Waste Of Space Foments Securities Law Problem

California Court of Appeal Justice William W. Bedsworth writes the popular syndicated column “A Criminal Waste of Space”.  In this month’s column, Justice Bedsworth expounds on the highly improbable case of a man who purchased a Pick-9 ticket at the track and somehow managed to pick all nine winners.  Szadolci v. Hollywood Park Operating Company,

Benefit Corporation Files For Initial Public Offering

A few years ago, I participated in the drafting of California’s Flexible Purpose Corporation Act, Cal. Corp. Code § 2500 et seq.  In 2014, the legislature changed the name to “Social Purpose Corporations Act”.  SB 1301 (DeSaulnier).  The purpose of the act was (and still is) to provide an alternate form of corporation that provided greater flexibility

Insider Trading, Newman And Der Prozess


The U.S. Supreme Court’s denial of review in U.S. v. Newman, 773 F.3d 438 (2014) yesterday inspired the following very short tale: Joseph K. knew that he had done nothing wrong, but, one morning, he was arrested.  Joseph K. asked the officer “why have I been arrested?”  The officer replied “insider trading”.  “What statute is that?” asked

Now This Is Truly Discomfiting – The SEC Proposes To Give Itself A 270 Day Extension!


In July 2010, Congress ordered the Securities and Exchange Commission to adopt a resource extraction rule within 270 days (i.e., by April 17, 2011).  The SEC missed that deadline by 1 year, 4 months and 2 days (or a total of 490 days).  In 2013, however, the U.S. District Court for the District of Columbia vacated

Do Public Pension Funds Breach Their Fiduciary Duties By Pursuing Social Issue Proposals?

Yesterday, UCLA Law School Professor Stephen Bainbridge noted the publication of a recent study that reaches some devastating conclusions for public pension funds.  The study by Professor Tracie Woidtke at the University of Tennessee found that “public pension funds’ ownership is associated with lower firm value”.  To make matters even worse, Professor Woidtke found: Social-issue

NASAA Mistakes The Principal

I have frequently commented on the fact that many so-called “investor protections” have the unintended consequence of increasing the risk of investor losses.  One example is limitations on resales.  An illiquid security presents greater risk than a liquid security.  Investors understand this and will apply an illiquidity discount to the price of a security.  In this

Proposed Initiative Seeks Vote On California Nationhood

Earlier this month, California’s Secretary of State announced that the proponent of a California nationhood proposal may circulate the initiative for signature.  The proponent must secure the signatures of 365,880 registered voters (five percent of the total votes cast for governor in the November 2014 general election) in order to qualify the initiative for the November 2016

When Is Medical Information Considered Sensitive?

As discussed in yesterday’s post, the Securities and Exchange Commission has proposed that persons involved in administrative proceedings be required to submit all documents and other items electronically.  Under the SEC’s proposal, parties would be required to omit “sensitive health information” that is identifiable by individual.  The Privacy Act of 1974, however, prohibits agencies from disclosing information that

SEC Proposes “A Clearly Unwarranted Invasion of Personal Privacy”

Last week, the Securities and Exchange Commission proposed that persons involved in administrative proceedings be required to submit all documents and other items electronically.  The SEC is proposing these rules as part of its effort to create a comprehensive Internet-based electronic system that would, among other things, allow for the electronic filing and service of documents in

The Delaware Court Of Chancery’s Not So Exclusive Jurisdiction

Section 145(k) of the Delaware General Corporation Law is quite clear and emphatic about which court may hear actions for indemnification or advancement of expenses: The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw,