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CALIFORNIA CORPORATE & SECURITIES LAW

Corp Fin’s New Rule 701 C&DI And California’s Compensation Plan Exemption

Yesterday, Broc Romanek reported that Corp Fin has published a new C&DI addressing the permissibility of electronic delivery of disclosures under Rule 701(e).  Readers will recall that Rule 701 is an exemption from the registration requirements of the Securities Act for offer and sales of securities pursuant to compensatory benefit plans and contracts.  The rule is…

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Does The California Finance Lenders Law Prohibit “Table Funding”?

A loan is “table funded” when at settlement it is contemporaneously assigned to the person that provides the funds.  Is table funding an illegal business practice under the California Finance Lenders Law?  The Fourth District Court of Appeal has its doubts: Preciado premises these claims on an assertion table funding is an illegal business practice…

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BrokerCheck – FINRA’s Dread Permanent Record

Many a school child has received the awful warning to be careful lest some offense be entered on his or her “permanent record”.  As required by statute (15 U.S.C. § 78o-3(i)), the Financial Industry Regulatory Authority, Inc. (aka FINRA) has maintained a sort of permanent record for securities professionals known as “BrokerCheck“.  See FINRA Rule 8312.  Just…

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What’s The Plural Of Condominium?

Wednesday’s post was entitled “Condominiums And The California Corporate Securities Law“.  Today’s post concerns whether I used the proper plural form of “condominium”. “Condominium” is derived from the Latin words, cum and dominium.  Cum means with or together and dominium means right of ownership.  Dominium is a neuter noun in the Latin Second Declension, meaning that its plural form is formed by…

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Promoters And California’s Limited Offering Exemption

I was admitted to the bar the same year that the legislature completed its parturition of a new limited offering exemption under the Corporate Securities Law of 1968 – California Corporations Code Section 25102(f).  AB 1518, Cal. Stats. 1981, ch. 1120.  Section 25102(f) exempts the offer and sale of securities from the issuer qualification requirement established by…

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Condominiums And The California Corporate Securities Law

Some four years ago, I wrote about the Ninth Circuit Court of Appeals’ holding in Salameh v. Tarsadia Hotel, 726 F.3d 1124 (9th Cir. 2013).  For those readers who don’t remember the post or the case, the Court of Appeals held that the plaintiffs had failed to allege the sale of a security under federal or California…

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Post No Bills

Planning for a congregational picnic this Sunday past, a local Lutheran church sought permission to use the neighboring Catholic church’s parking lot.  The Catholic church graciously agreed to allow the use of its lot provided that the Lutherans refrain from posting anything on their church door.  The Catholic’s proviso, of course, was a reference to an event…

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A Corporate Law Takeaway From Judge Nelson’s Ruling In Talcum Powder Case

Mg3Si4O10(OH)2 After a three week trial that included extensive expert testimony, a Los Angeles jury returned a $417 million verdict against Johnson & Johnson ($68 million non-economic and $340 million punitive damages) and its subsidiary Johnson & Johnson Consumer, Inc. ($2 million non-economic and $7 million punitive damages).  Johnson & Johnson Talcum Powder Cases, Los Angeles…

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What Every Delaware Unicorn Needs To Know About The California General Corporation Law

Recently, I came across a list of unicorns.  These are private companies with valuations of $1 billion or more.  I can’t vouch for the accuracy of the list, but I did recognize many of the names.  Many of the companies on the list shared two characteristics – they are incorporated in Delaware and headquartered in…

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Valid Reasons May Exist For Reincorporating In Delaware, But This Isn’t One Of Them

I am always interested in the reasons that corporations give when seeking approval to reincorporate from California to Delaware.  One company in a recently filed proxy statement made the following claim (among others): Enhanced Flexibility to Engage in Stock Repurchase Programs. The Company will have an enhanced ability to make distributions to its shareholders (i.e.,…

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