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CALIFORNIA CORPORATE & SECURITIES LAW

Is The SEC’s Universal Proxy Proposal A Product Of Agency Capture?

More than six decades ago, the late Professor Marver H. Bernstein published his theory of regulatory capture in Regulating Business By Independent Commission (Greenwood Press 1955).  According to his theory, agencies follow a life cycle of birth, maturity and old age.  As an agency enters senescence, it inevitably becomes captive to the groups that it regulates.…

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Incorporating In Delaware May Not Eliminate Director Liability Under This California Statute

Some readers may have skipped this week’s posts discussing director liability under California Corporations Code Section 316 on the theory that the statute applies only to directors of corporations incorporated under the General Corporation Law.  That could be a big mistake.  California’s pseudo foreign corporation statute, Corporations Code Section 2115, applies Section 316 to foreign…

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A New Regulatory Paradigm For The SEC?

Many are speculating on the future of federal securities regulation as a result of the election of Donald J. Trump and the concomitant Republican control of both houses of Congress. Broc Romanek, for example, asks whether Michael S. Piwowar will become the SEC’s next Chairman.  Broc notes that Commissioner Piwowar is an economist, not a lawyer. …

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Does Placing Non-GAAP Financial Measures First Violate The Law?

Yesterday’s post discussed the SEC staff’s recently announced position that Item 10(e)(1)(A) of Regulation S-K requires that issuers disclose comparable GAAP financial measures before non-GAAP financial measures. Item 10(e)(1)(A) requires only that issuers afford GAAP financial measures “equal or greater prominence” as non-GAAP measures.  What then is the legal significance of the staff’s position that GAAP…

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When The SEC Became A Real Estate Regulator

For at least a century, it has been said that only three things matter in real estate: location, location, location.  Recently, the Securities and Exchange Commission took this old saw to heart in the context of disclosure of non-GAAP financial measures.  The SEC’s fixation on location began this past May when the staff updated its Compliance and Disclosure Interpretations…

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“Tandy Letter” Requests – RIP

Broc Romanek reported yesterday that the staff of the Securities and Exchange Commission will no longer require “Tandy Letter” disclaimers in responses to staff comments.   Among other things, the Tandy Letter policy required a company to state affirmatively that it would not raise the SEC review process and acceleration of effectiveness as a defense in any legal proceeding. …

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Will California Public Pension Systems Go Underground In Implementing New Disclosure Law?

Writing in the Harvard Law School Forum on Corporate Governance and Financial Regulation, Catherine Skulan and  Raj Marphatia provide an interesting overview of California’s recently enacted alternative investment vehicle fee disclosure law, AB 2833.  This law requires public pension and retirement systems to require alternative investment vehicles, as defined, to make specified disclosures regarding fees, expenses, and…

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Chevron Deference In California

In mid July, the House of Representatives passed the Separation of Powers Restoration Act of 2016, H.R. 4768 (SOPRA).  If enacted, the SOPRA would amend the federal Administrative Procedure Act to require a reviewing court to decide “de novo all relevant questions of law, including the interpretation of constitutional and  statutory provisions, and rules made by agencies”.   The…

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Has The California State Treasurer’s Office Gone Underground?

Late last month, the California State Treasurer’s Office announced a “move to stop ‘Pay-to-Play’ school bond campaigns”.  According to the announcement: [M]unicipal finance firms seeking state business will be required to certify that they make no contributions to bond election campaigns. Firms that fail to do so will be removed from the state’s official list…

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Giving A Hand To Mandamus

“Mandamus” is the first person plural present indicative active form of the Latin word meaning to command.  It is most likely the result of combining the Latin word for “hand”, manus, with the Latin word “to give”, do.  Some readers may be familiar with the religious holiday with the unusual name of Maundy Thursday.  The word “maundy” is…

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