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CALIFORNIA CORPORATE & SECURITIES LAW

What if There is No Deficiency?

Yesterday, Broc Romanek reported that the staff of the SEC’s Division of Corporation Finance has issued a new Compliance & Disclosure Interpretation addressing Section 413(a) of the Dodd-Frank Act.  Section 413(a) requires the SEC to adjust the definition of “accredited investor” in its rules under the Securities Act of 1933.  In the first four years…

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A Rara Avis Indeed, The Capital Access Company

More than a decade ago, the California legislature added the Capital Access Company Law to the Corporations Code, Stats. 1998, c. 668 (S.B. 2189).  The intent of the law was to take advantage of an exemption to the Investment Company Act of 1940 that Congress added as part of the National Securities Markets Improvement Act…

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Closing the Barn Door . . .

Yesterday, I wrote about Section 413 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“DF Act”).  You can watch President Obama’s explanation of Wall Street reform here.  As a horse owner, I’m sensitive to expressions involving horses.  Thus, it occurs to me that in some ways the exclusion of an investor’s primary residence…

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People v. Cole – “So What Happens Now?”

Yesterday was the last day for comments on the Commissioner’s proposed rule to address the Court of Appeal’s holding in People v. Cole, 156 Cal. App. 4th 452 (2007).  I’ve seen that several persons have submitted comments in addition to myself – all addressing the exception for employees in the proposed rule. To reprise Evita…

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Can You Still Include Your Primary Residence in California?

With Congress’ passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “DF Act”), lawyers across the nation are struggling to come to grips with the act’s impact on their clients.  Lawyers representing businesses in need of capital, venture capital companies and hedge funds are noting that Section 413 of the act will…

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ICC – Requiescat in Pacem

The Interstate Commerce Commission was created in 1887 when Grover Cleveland was president.  Over the years, Congress greatly expanded the ICC’s authority.  At one time, the ICC had thousands of employees.  In 1995, President Clinton signed legislation abolishing the ICC and it has disappeared from the regulatory scene.  Strangely, however, the ICC lives on in…

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It Really Isn’t Too Late

As noted in yesterday’s post, the deadline for comments on the Commissioner of Corporation’s proposal to adopt a rule to address the Court of Appeal’s holding in People v. Cole, 156 Cal. App. 4th 452 (2007) was yesterday.  Yesterday, however, the Commissioner extended the comment period until July 20, 2010.  The opportunity for comment is…

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It’s Not Too Late

As a reminder, the comment period ends today on the Department of Corporation’s proposal to add a new rule, 260.004.1, to address concerns about the Court of Appeal’s holding in People v. Cole, 156 Cal. App. 4th 452 (2007).  In that case, the court upheld the criminal convictions of two individuals for engaging in unregistered broker-dealer…

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Stock Option Exercise – Sale or No Sale?

The Corporate Securities Law prohibits the offer and sale of a security in an issuer transaction “in this state” unless the sale is (a) qualified; (b) the security is exempt from qualification; (c) the transaction is exempt from qualification; or (d) not subject to qualification.  The term “sale” is defined in Corporations Code Section 25017(a) to include every…

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Yes, There is no “S” in California

Regulation S has been available for two decades.  The rule establishes nonexclusive safe harbors for offers, sales and resales of securities outside the United States.   Over the years, many foreign and domestic issuers have relied upon the rule to conduct offshore offerings without complying with the registration and prospectus delivery requirements of the Securities Act of 1933.  As servicable…

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