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CALIFORNIA CORPORATE & SECURITIES LAW

Standard Of Review Is Clear For Administrative Interpretations Of Statutes And Rules

A few days ago, I noted the Court of Appeal’s opinion in Davis Test Only Smog Testing v. Dept. of Consumer Affairs, 2017 Cal. App. LEXIS 855.  That post concerned the Court’s holding that the plaintiffs’ due process rights had not been violated by lay representation at an administrative hearing.  Not discussed in the post was the Court’s handling of…

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Attorney General Opines On Lay Representation At Administrative Hearings

Over three years ago, I wrote that California’s Office of Administrative Hearings had requested the California Attorney General provide an opinion answering the following question: Does the Administrative Procedure Act (Gov. Code, §§ 11340-11529) authorize a party to a proceeding conducted by the Office of Administrative Hearings to be represented by a person who is not…

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CalPERS And Securities Lending – Waiting For Godot?

California Government Code Section 7603 is short and unambiguous: All loans of securities shall be made pursuant to one of the standardized security loan agreement forms, as developed by the administrators of the State Pooled Investment Account (as authorized by Section 16481 of the Government Code) or the Public Employees Retirement System or the State…

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California Finders Rule May Soon Take Effect

Nearly one year ago, the California Department of Business Oversight proposed regulations to implement the provisions of AB 667 (Wagner).  The bill, which was enacted in 2015 and took effect last year, created a new exemption from the broker-dealer requirements for finders, or individuals who, for compensation, introduce potential investors and issuers of securities to each other.  The proposed regulations,…

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If The Market Makes You Do It, Why Should The SEC?

The basic premise underlying most disclosure requirements seems to be that issuers won’t disclose to investors unless legally required to do so.  Yet, there is ample evidence of issuers making disclosures in the absence of legal compulsion.  Below are just a few examples: Earnings announcements.  While SEC rules require companies to file quarterly and annual…

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The SEC’s Flawed Changes To Exchange Act Forms

Title I of the Jumpstart Our Business Startups (aka JOBS) Act amended the Securities Act and the Exchange Act to provide some regulatory relief to issuers that qualify as an “emerging growth company”.  Recently, the Securities and Exchange Commission adopted various changes to its forms and rules to conform to Title I.  The SEC elected not to comply with the notice and…

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Can The Legislature Hire Its Own Lawyer?

In early January, California Senate President pro Tempore Kevin de León and Assembly Speaker Anthony Rendon jointly announced that the California Legislature had hired outside legal counsel to advise on potential legal challenges with the incoming administration of Donald Trump.  I found this interesting as I could not recall a prior circumstance in which the legislature had ever…

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Must A False Statement To A Franchisee Be Made “In this state”?

The list of instruments and interests included within the definition of a “security” in California Corporations Code Section 25019 is long.  A franchise, however, is not to be found amongst the named.  In fact, the statute specifically excludes a franchise subject to registration under the California Franchise Investment Law (Corporations Code Section 31000 et seq.) or exempt…

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Will Congress Deep Six The SEC’s Resource Extraction Rule?

In December of last year, I wrote about how the Securities and Exchange Commission’s Resource Extraction Rule might meet an untimely end.  See There’s Still Time For Congress To Void The SEC’s Resource Extraction Rule (Dec. 14, 2016).  The rule, Rule 13q-1 and an amendment to Form SD, had an extraordinarily difficult birth: Congress had ordered…

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Will The Bureau Of Real Estate Get A Promotion?

 “Not since Clytemnestra and Agamemnon has there been such a mismatch.” Almost five years ago, I decried the demotion and relocation of the Department of Real Estate: Although the DRE issues professional licenses, it is fundamentally a business regulatory department that regulates an industry with an enormous impact on California’s economy.  The activities of its…

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