How A Train Wreck Changed The Constitution

In the early morning of October 3, 1970 on rural road just outside San Jose, 61-year old Engineer Anthony Gassell was at the controls of his Southern Pacific locomotive as it headed northwest.  At the same time, 24-year old Kathryn Colville was driving with her 2 1/2 year-old son, Paul, to feed her horse.  As

To Whom Does “Related Parties” Refer In A.S. No. 18?

In June of last year, the Public Company Accounting Oversight Board adopted Auditing Standard No. 18 which “establishes requirements regarding the auditor’s evaluation of a company’s identification of, accounting for, and disclosure of relationships and transactions between the company and its related parties.”  Because A.S. #18 is effective for audits of financial statements for fiscal years beginning

ISS Ignores Contrary Studies In Adopting Overboarding Policy Change

ISS released its 2016 Benchmark Policy Recommendations last Friday.  I had previously criticized ISS for its proposal to change its recommendation on withholding votes with respect to directors who sit on too many boards: In proposing this policy change, ISS cites surveys that reflect an increase in the time commitment required for board service. ISS

Enjoining The Correct Spelling

In yesterday’s post, I wrote that Judge Leigh Martin May had issued a ruling enjoining a SEC administrative proceeding.  Presumably, Judge May has or will issue an injunction.  This leads me to question why the verb is typically spelt “enjoin” while the noun is spelt “injunction”.  Both words share the same roots – they are formed by

Court Enjoins SEC Administrative Proceeding

Last March, I posed the following question:  But if you were hailed before an unconstitutional tribunal with the ostensible authority to fine you and bar you from working, would you want a “real” court to step in and consider the constitutionality of the proceedings? At the time, I was disappointed by U.S. District Court Judge Rudolph

Is There A State Role For Binary Option Regulation?

The North American State Securities Administrators Association (NASAA) recently warned investors about the risks of investing in binary options.  While NASAA asserts that many binary trading platforms are “unregulated or are completely illegal”, I found it surprising that it didn’t cite any state securities or other laws that might regulate, much less outlaw, binary options

If It Doesn’t Sell Buckets, Is It Truly A Bucket Shop?

An often overlooked corner of the California Corporations Code is the Bucket Shop Law, Cal. Corp. Code § 29000 et seq.  The law quite literally criminalizes the keeping of a bucket shop: Any person who . . . is the keeper of any bucket shop, is guilty of a felony. Cal. Corp. Code § 29100.  However, this is

Society Warns ISS That Overboarding Policy Change Will Hurt Women And Minority Directors

Recently, I criticized ISS’ proposed changes to its policy on “overboarding”.  Therefore, I was pleased to see that I wasn’t a lone voice crying in the wilderness.  The Society of Corporate Secretaries and Governance Professionals also submitted a comment letter to ISS.  The Society echoed my observation that ISS had provided no evidentiary support for

The California Political Contribution Case That 19 Law Professors Missed

Earlier this week, I wrote about an amicus curiae brief submitted by 19 law school professors Friedrichs v. Cal. Teachers Ass’n, a case now pending before the United States Supreme Court.  In particular, I questioned whether these academics properly described the holding Finley v. Superior Court, 80 Cal. App. 4th 1152 (2000).  The professors claimed that the case represented a “rare example” of a

CalPERS To Consider Support For Corporate Political Spending Disclosure Mandate

Next week, the California Public Employees Retirement System will consider a staff recommendation “to update the legislative and policy guidelines to include support for Securities and Exchange Commission (SEC) rulemaking on disclosure of the use of corporate resources for charitable and political activities.”  Under the California Constitution (Art. XVI, § 17(b)), the members of CalPERS’