At CalPERS, the News Continues to be Bad
Last month, Evan Halper of the Los Angeles Times wrote this story about the level of transparency at the California Public Employees Retirement System (CalPERS). In this story, he reports that while CalPERS has hired an outside law firm, “[w]hat exactly CalPERS has ordered the firm to do and how much it is paying for those services are unclear. CalPERS is Read more...
Does the Dodd-Frank Act Revive the CA Bucket Shop Law?
California has had its current Bucket Shop Law on the books since 1949. The Bucket Shop Law, among other things, voids all contracts for the purchase or sale of shares without any intention on the part of one party to deliver, and the other party to receive, the shares, and contemplating the payment of the difference between the contract price Read more...
Dodd-Frank Act Preempts CSL Qualification of Certain Securities
Most securities lawyers are familiar with federal preemption of state qualification requirements pursuant to Section 18 of the Securities Act of 1933 (“Securities Act”). See, e.g., my post regarding preemption and Rule 506 offerings. I expect that fewer lawyers are familiar with preemption pursuant to Section 28(a) of the Securities Exchange Act of 1934 (“Exchange Act”). In 2000, Congress amended Section 28(a) Read more...
CalPERS’ Focus List – Results and Prospects
The CalPERS Focus List has been around for almost a quarter century. Each spring, CalPERS ”names names” by listing from 4 to 11 companies that it believes have records of poor economic and corporate governance performance. Here is a flow-chart of the current Focus List process. Interestingly, CalPERS did not issue a Focus List this year. See this story by Barry Read more...
California’s Institutional Investor Exemption
California has an exemption from the issuer qualification requirement under the Corporate Securities Law of 1968 for any offer or sale to, among other listed entities, institutional investors or governmental agencies or instrumentalities that the Commissioner of Corporations may designate by rule. Rule 260.102.10 designates certain entities as institutional investors, but that rule hasn’t been amended since Survivor was belting out “Eye Read more...
CalPERS Proposes Changes to Disclosure Rule
Yesterday, the California Public Employees Retirement System (CalPERS) issued this notice of proposed amendments to its placement agent disclosure rules. The comment period ends on August 26, 2010. As first posted, the notice stated that CalPERS’ Board of Administration will be considering modified regulations at its meeting next Monday, August 16, 2010. This didn’t make a lot of sense. When I brought Read more...
Rule 260.204.9 – “What is to be Done?”
As I mentioned in this earlier post, California has its own definition of “venture capital company” in Rule 260.204.9. This rule is an exemption from the investment adviser registration requirement in Corporations Code Section 25230 if a person meets the following conditions: Does not hold itself out generally to the public as an investment adviser; Has fewer than 15 clients; Is exempt from Read more...
No Form D Filing – Now What?
In 1996, Congress added Section 18 to the Securities Act of 1933 as part of the National Securities Markets Improvement Act (NSMIA) to preempt state qualification requirements with respect to “covered securities”, as defined. Section 18(b)(4)(D) provides that a security is a covered security with respect to specified types of transactions. One such transaction is a transaction under Rule 506 Read more...
Placement Agent Bill Amended
The amendments to AB 1743 (Hernandez) are now in print. This bill would require placement agents with respect to California public retirement systems to register as lobbyists. These amendments address several technical concerns that I had with earlier versions of the bill. In particular, I thought that the bill confused the two situations in which placement agents are used to Read more...
