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A California Take on the SEC’s Pay-to-Play Rule

Earlier today, the Securities and Exchange Commission issued its final pay-to-play rule.  Among other things, the rule prohibits investment advisers from providing advisory services for compensation to a government client for two years after the adviser or certain of its executives or employees makes a contribution to specified elected officials or candidates. Because this blog…

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How to Avoid a Filing Fee

When forming a subsidiary corporation, many lawyers rely on the exemption contained in Corporations Code Section 25102(f) or upon federal preemption via Corporations Code Section 25102.1(d).  Both of these sections require the filing of a notice with the Commissioner of Corporations (although the failure to file a notice of exemption under Section 25102(f) does not affect the availability…

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Dividends: Sale or No Sale?

When a corporation distributes its own securities to its existing shareholders, there is no sale – correct?  Well, maybe not. Corporations Code 25017(f) does exclude from the definition of “sale” any “stock dividend payable with respect to common stock of a corporation solely (except for cash or script paid for fractional shares) in shares of common stock,…

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Commissioner DuFauchard Proposes Broker-Dealer Safe Harbor Rule

In 2007, a California Court of Appeal held that corporate officers and directors may be subject to licensure as broker-dealers unless they receive a commission for the sale of securities.  People v. Cole, 156 Cal. App. 4th 452 (2007).  Although the court’s holding should be viewed in the context of the unique facts of that…

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CalPERS’ Proposed Placement Agent Disclosure Rule Likely to be Amended

Last year, the California legislature enacted AB 1584 as an urgency measure. That legislation required the retirement boards of each public pension or retirement system to develop and implement, on or before June 30, 2010, a policy requiring the disclosure of payments to placement agents. CalPERS had previously adopted a disclosure policy but had not…

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The Disappearing Line Between Public and Private Companies

Recently, I was interviewed by a Bay Area radio station concerning trading in shares of privately held companies.   This inspired me to write a piece for the Los Angeles Daily Journal on the same subject.  You can read that article here.  The securities rules haven’t changed but the Internet has significantly lowered transaction costs for…

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