Supreme Court To Decide If It Will Decide Whether Section 16 Plaintiff Has Constitutional Standing
No Harm, No Foul The late Lakers broadcaster Chick Hearn was known for coining or popularizing numerous basketball expressions, including “air ball” and ”no harm, no foul”. Now, the U.S. Supreme Court may soon decide whether the principle of “no harm, no foul” applies to Section 16, the other insider trading statute. Do Section 16 Plaintiffs Suffer Injury In Fact? In 2009/2010, Read more...
The PUHCA, Chenery & The Run For The Roses
Earlier this week, I mentioned the former Public Utility Holding Company Act (aka PUHCA). Although it was repealed several years ago, the PUHCA remains important as the legal substrate upon which the famous, and still important, Chenery cases were decided. Trading by Insiders, But No Insider Trading The Chenery cases involved the SEC’s authority under the PUHCA to approve utility reorganizations. In the Read more...
How Many Ways Can The SEC Describe A “Year”?
It’s not easy to write regulations and lawyers can be a hypercritical group. Nonetheless, the Securities and Exchange Commission’s rules can be maddingly inconsistent. As one small example, I offer Item 405 of Regulation S-K and its many references to “year”. In general, the purpose of Item 405 is to require disclosure of late filers under Section 16(a) of the Securities Read more...
Court Clears Way For Case Against CalPERS, Judicial Council & Prison Healthcare Receiver
Nearly two years ago, Mr. Daniel E. Francis filed a petition for writ of mandamus against CalPERS and other based on allegations that the pension fund had laundered the salary of the receiver appointed by the U.S. District Court through the state’s Administrative Office of the Courts. In July 2012, Judge Michael P. Kenny rejected the demurrers filed by CalPERS and the Read more...
Without An “Intelligible Principle” Can The SEC Adopt Political Spending Rules?
In August 2011, Professor Lucian Bebchuk and nine other law professors submitted this petition asking that the Securities and Exchange Commission adopt rules requiring public companies to disclose to shareholders the use of corporate resources for political activities. In early January, Professor Bebchuk confidently predicted in this post that the SEC would issue a notice of proposed rulemaking “by April”. At the Read more...
Department Of Corporations Issues Crowd Funding Bulletin
Last week, the Department of Corporations issued this bulletin which it styled as a “Crowdfunding Update”. The Bulletin makes several important points. Until the Securities and Exchange Commission adopts regulations, there is no federal crowd funding exemption. It should be noted that Congress mandated that the SEC adopt these regulations by December 31, 2012. As of today’s date, the SEC Read more...
CalPERS To Consider External Investment Resource Disclosure Rule
Last August the Investment Committee of the California Public Employees’ Retirement System (CalPERS) approved revisions to its External Investment Resource Conflict of Interest Policy. A week later, I asked the Office of Administrative Law to make a determination that the policy was an illegal “underground regulation” (i.e., a rule that has not been adopted in accordance with the rulemaking provisions of Read more...
Court Orders Disclosure Of Venture Capital Fund Performance
California’s analog to the Freedom of Information Act is the Public Records Act, Government Code § 6250 et seq. In enacting the the Public Records Act, the legislature quite properly found and declared that “access to information concerning the conduct of the people’s business is a fundamental and necessary right of every person in this state.” Of course, there are countervailing Read more...
Could The Product Of Two Debts Really Be A Fortune?
In 628 in the Gurjar capital city of Bhillamala (now, Bhinmal, India), the mathemetician Brahmagupta set out to explain how zero and negatives numbers work. In his book, Brahmasphutasiddhanta, he set forth the rule that the product of two negative numbers (debts) is a positive number (fortune). Translating this fundamental mathematical concept into the present century, I’m pondering (pondering, not opining) whether the same rule might Read more...
SEC Faces A Swarm Of Legal Issues In Considering The Investor Advisory Committee’s Recommendations Concerning General Solicitation
The SEC’s Investor Advisory Committee held another meeting last week with Elisse B. Walter making her first public appearance as SEC Chairman. She and Commissioner Luis A. Aguilar had many kind words for the Committee’s recommendations with respect to lifting the ban on general solicitations in Rule 506 offerings. The insouciance of their remarks, however, was in sharp contrast with Read more...
