NASAA Supports Regulatory Relief For M&A Brokers

Last June, Congressman Bill Huizenga introduced H.R. 2274 which would amend the Securities Exchange Act of 1934 to provide for a notice-filing registration procedure for brokers performing services in connection with the transfer of ownership of smaller privately held companies.  In most cases, registration would be effective upon filing.  Given NASAA’s generally jaundiced view of

Subcommitee Recommends SEC Rules Imposing Fiduciary And Disclosure Duties On Brokers

Recently, the Securities and Exchange Commission posted two recommendations by the Investor as Purchaser Subcommittee of the Investor Advisory Committee.  In general, the Subcommittee recommended: The SEC should conduct a rulemaking to impose a fiduciary duty on broker-dealers when they provide personalized investment advice to retail investors; and As part of its rulemaking, the SEC should adopt

Commodities And The CSL

A recent unpublished opinion by Justice William W. Bedsworth set me to cogitating on the status of commodities under the Corporate Securities Law of 1968.  In Kelly v. Monex Co., 2013 Cal. App. Unpub. LEXIS 5903 (Aug. 21, 2013), the plaintiff had lost substantial amounts in trading gold and silver through the defendant.  She sued and the

Court Holds Non-Parties May Enforce Arbitration Agreement Even Though The General Rule Is That They Can’t

The Financial Industry Regulatory Authority, more commonly known as FINRA, has adopted a Code of Arbitration for Customer Disputes (FINRA has a separate code for industry disputes).  Under FINRA’s Customer Code, a claim by or against an inactive member is ineligible for arbitration unless, after the claim arises, the customer agrees in writing to arbitrate.  Rule 12202. 

No Happy Trails For Victorville Tax Increment Bond Financing

For more than thirty years, I’ve driven by, but never stopped at, the Roy Rogers and Dale Evans Museum in Victorville, California.  The museum eventually relocated to Missouri but reportedly did not survive for long.  Despite this notable defection, Victorville has grown remarkably in the last three decades.  Unfortunately, it now finds itself accused of

Law Mandates CalPERS/CalSTRS Support For Shareholder Resolutions Supporting Religious Minorities

In 1999, the legislature enacted SB 105 (Burton) which obligates CalPERS and CalSTRS to support, whenever feasible, shareholder resolutions at domestic and international corporations in which those funds have invested that are designed to encourage, among other things: Increased representation of individuals from underrepresented religious groups in the work force, including managerial, supervisory, administrative, clerical, and technical

Ninth Circuit Holds Private Company Rules Preempt California Law

California’s Statutory Prohibition on Forced Patronage California Labor Code Section 450(a) forbids employers from coercing the patronage of their employees:  It provides: “No employer, or agent or officer thereof, or other person, may compel or coerce any employee, or applicant for employment, to patronize his or her employer, or any other person, in the purchase

Federal Court Sides With Second DCA In Privity Split

In Moss v. Kroner, 197 Cal. App. 4th 860 (2011), the Second District Court of Appeal found that rescission was available to a plaintiff under Corporations Code Section 25504 even though the plaintiff was not in privity with the defendant.  Section 25504 imposes liability on specified persons who are in “control” of persons who are liable under Section

Eureka! Bill Introduced To Homologate Finders

Questions about the use of finders have bedeviled transactional lawyers for years.  The need for finders is the unintended consequence of the federal and state securities law exemptions that are conditioned on the absence of a general solicitation.  Most start-ups don’t have preexisting relationships with rich people (aka accredited investors).  Thus, they are sorely tempted

When Asking For Spousal Consent Is Unlawful

From time to time, a question will arise about the necessity of obtaining spousal consent in connection with the purchase or sale of a security.  Interestingly, California declares it unlawful for any agent or broker-dealer to require prior spousal consent or authorization as a condition to the purchase or sale of securities in the name of