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CALIFORNIA CORPORATE & SECURITIES LAW

Must A Fund’s General Partner Be Registered?

The typical responsibilities of a general partner of an investment limited partnership are to handle the business and administrative aspects of the fund.  In return, the general partner is compensated – often, based on a percentage of the assets under management.  This structure, of course, creates the question whether the general partner must be registered…

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California Choice of Law, Jurisdiction & Venue Clauses

The boilerplate section of many corporate agreements include a “governing law” provision.  Often these provisions cover three related, but distinct choices – choice of law, choice of jurisdiction, and choice of venue.  More importantly, the legal principles that govern these choices are not the same (at least here in California).  In today’s posting, I discuss a…

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From DFI to CSBS to FSOC

Section 111 of the Dodd Frank Wall Street Reform and Consumer Protection Act established the Financial Stability Oversight Council (FSOC).  In fact, the FSOC had its first meeting on October 1.  Although all of the voting members (with one exception) are members by virtue of their position as federal officials, California did have one seat…

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Private Placements And The Internet

Many securities lawyers are familiar with the SEC staff’s position in the IPONET no-action letter (July 26, 1996).  That letter is frequently referred to in discussions on how to conduct a private placement on the Internet without violating the prohibition on general solicitation or general advertising found in Rule 502(c). What may be less well…

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California’s General Announcement Exemption

Issuers offering or selling securities in California must qualify those offers and sales with the Department of Corporations unless they are exempt from, or not subject to, qualification.  Cal. Corp. Code § 25110.   Since the enactment of the Corporate Securities Law in 1968, the Legislature has added exemptions and Congress has preempted state qualification requirements…

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Did The SEC Really Have Good Cause To Grant Accelerated Approval Of Amendments To NYSE Rule 452?

On September 9, 2010, the Securities and Exchange Commission granted accelerated approval of the New York Stock Exchange’s proposed amendments to Rule 452.   Echoing the Queen of Hearts (“Sentence first – verdict afterwards”), the SEC at the same time announced that it was soliciting comments on the “proposed” rule change.  The NYSE proposed the rule to meet…

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New Form ADV Part 2 Has Now Arrived In California

 As a reminder, the California Department of Corporations this week began allowing investment adviser applicants and licensed investment advisers filing amendments to their Part II of Form ADV to use either the current Part II or the new Part 2 to Form ADV.  For more on this topic, see my earlier post.

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SEC’s Proposed “Family Office” Rule and Rule 260.204.9

In The Snows of Kilimanjaro, Ernest Hemingway wrote: “‘The very rich are different from you and me.’ And how someone had said to Julian, ‘Yes, they have more money.’”   That is certainly true in the case of the families described in the Securities and Exchange Commission’s recently proposed family office rule. According to the SEC,…

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Usury Exemption Bites Back

Last week, I wrote about the oft overlooked California Finance Lenders (CFL) law.  In general, that law provides that anyone engaged in the business of making consumer or commercial loans must obtain a license from the Department of Corporations (unless an exemption is available). CFL licensees do enjoy one benefit.  They constitute a class of “exempt persons”…

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Raising Capital Without Violating CA Securities Laws

On October 21, 2010, I will be speaking to the Business Law Section of the Bar Association of San Francisco on how to raise capital without violating California’s securities laws.  I plan to discuss the following topics, among others: Common (and not so common) exemptions Using (and abusing) the internet Finders and broker-dealer issues Investor…

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