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CALIFORNIA CORPORATE & SECURITIES LAW

LLC Contractor License Bill Moves One Step Forward

A lot of bills didn’t make it out of the legislature by the August 31 deadline.   However, SB 392 (Florez) was one of the fortunate few to make it to enrollment.  If signed into law by Governor Schwarzenegger, this bill will allow limited liability companies to render contractor services that are “professional services” otherwise prohibited by the…

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DOC To Mandate Use of New Part 2 to Form ADV

Yesterday, the Department of Corporations issued this notice to investment advisers registered with the it.  The notice advises that the Department is adopting the new Part 2 to Form ADV effective October 12, 2010.  The Department has announced the following compliance dates: As of January 1, 2011 all new investment adviser applicants will have to file, through the…

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“Cooked Dividends” Leads to Bloody Massacre

Cooking dividends is the practice of declaring a false or “cooked” dividend for the purpose of raising the value of a company’s shares.   Apparently, this was a serious problem in the early days of both California and Nevada.  The practice is still illegal under the California General Corporation Law.  Section 2254, among other things, makes…

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“Extracts from the SEC’s Proxy Access Amendments, With Some Remarks Upon Them”

James McRitchie at Corpgov.net recently made reference to a forthcoming law review article by J.W. Verret at George Mason University School of Law.  Professor Verret posits in various strategems for discouraging shareholder nominations.  He writes from a Delaware perspective (he was a law clerk to Vice Chancellor John W. Noble) and as someone who has worked under the…

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Placement Agent Bill Passes

The legislature has passed and sent AB 1743 (Hernandez) to Governor Schwarzenegger for signature.  If signed into law, this bill will require placement agents with respect to public retirement systems to register as lobbyists.  This would have many disclosure and economic consequences for placement agents and their employers.  One of these consequences will a ban…

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Legislative Session Now Ended (Almost)

Yesterday was the end of the current legislative biennium.  Under the California Constitution and legislative rules, this means that any bill not passed before today is now dead.  Cal. Cons. Art. IV, § 10(c), Legislative Joint Rule No. 61(b)(17)). As with most things legal, there are exceptions.  Article IV, Section 10(c) of the Constitution excepts…

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CA AG Files Criminal Complaint Against Sellers of Movie Loans

Last week, the California Attorney General filed this 89 count criminal complaint against three individuals.  The complaint alleges that these individuals offered and sold securities without qualification under the Corporate Securities Law of 1968.  An interesting aspect of this cases is that it involved the alleged offer and sale of securities in the form of loans.  According…

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Proxy Access and Director Qualification Requirements

Last week, the Securities and Exchange Commission adopted its final changes to the federal proxy rules.  These new rules will require public companies, under specified circumstances, to include in their proxy materials information about, and the ability to vote for, a shareholder’s (or shareholder group’s) nominee(s) for director.  In adopting these rule changes, the SEC expressly…

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State Shareholder Nomination Rights

The nice thing about being a corporate and securities lawyer is that I’m never at a loss for new reading material.  Just as I was beginning to despair about what to read after the Dodd-Frank Act, the Securities and Exchange Commission issued its adopting release on facilitating shareholder director nominations.  While no A La Recherche…

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CalPERS Corrects Placement Agent Notice (Again)

Yesterday, the California Public Employees Retirement System (CalPERS) issued another corrected notice regarding its proposed placement agent disclosure regulations.  The notice had incorrectly stated that the CalPERS Investment Committee would consider the modifications to the proposed regulations at a meeting on September 16, 2010.  The correct date is September 13, 2010.  Comments on the modifications, however,…

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