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CALIFORNIA CORPORATE & SECURITIES LAW

CalPERS to Consider Changes to Name and Shame Methodology

In 1987, the California Public Employees Retirement System (CalPERS) initiated its “Focus List” program.  Under this program, CalPERS identifies companies to a preliminary list.  CalPERS then contacts these companies for the purpose of “encouraging” corporate governance changes.  If CalPERS is satisfied with a company’s response, then it is not named to the public Focus List. …

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CalPERS’ 3D Advisory Committee May Be Appointed Soon

The California Public Employees Retirement System (CalPERS) and the California State Teachers Retirement System (CalSTRS) have teamed up on an initiative called the Diverse Director Database (3D Program).  According to CalPERS, the 3D Program is intended to be a “resource that nominating committees, shareowners, search firms, educators, and diversity practitioners can use to ensure public…

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“And What They Will Inform. . .That Will The King Severely Prosecute”

Last month, I asked the California Attorney General’s office for information concerning utilization of the whistleblower hotline mandated by Labor Code § 1102.7.  Below are the data provided to me: Year Number of Calls 2004 0 (partial records for five months) 2005 62 (partial records for seven months) 2006 167 2007 519 2008 661 2009…

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Advisory Votes On Executive Compensation May Have Teeth

While the executive compensation votes mandated by the Dodd-Frank Act are just advisory, they do have the potential for significant impact. With the popularity of majority vote requirements in uncontested elections, incumbent directors may face significant withhold campaigns if they appear to ignore stockholder preferences. This means that accurately measuring stockholder preferences will be key.  The…

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Dropping a Dime in California

In this recent post, I wrote about California’s employee whistleblower legislation.  California Labor Code § 1102.7 requires the California Attorney General to maintain a whistleblower hotline to receive calls from persons who have information regarding possible violations of state or federal statutes, rules, or regulations, or violations of fiduciary responsibility by a corporation or limited…

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California’s Whistleblower Hotline

Yesterday, the Securities and Exchange Commission proposed rules for implementing the whistleblower provisions of the Dodd-Frank Act.  That act established a whistleblower program that requires the SEC to pay a bounty to eligible whistleblowers who voluntarily provide the SEC with original information about a violation of the federal securities laws that leads to the successful…

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A Proxy Is Not A Vote And Why It Matters

As discussed in this prior post, the Securities and Exchange Commission recently proposed rule amendments to implement the Dodd-Frank Act’s executive compensation advisory votes mandates.  Regrettably, the SEC’s proposal perpetuates the common misconception that executing a proxy is the same as voting.  For example, the SEC’s proposed Rule 14a-4(b)(3) refers to “[a] form of proxy which provides for a shareholder vote…

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The SEC’s Proposed Advisory Vote Rule Favors Large Minority Shareholders

The Securities and Exchange Commission continues to pump out rule proposals at “warp speed” in order to meet the mandates of the Dodd-Frank Act.  Last week, the Commission issued this proposal with respect to shareholder advisory votes concerning executive compensation and golden parachute compensation.  Because the Dodd-Frank Act requires a shareholder advisory vote on the…

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Ninth Circuit Declares No General Alter Ego Claim Exists In CA Law

When alter ego is alleged, the question may arise as to whether the theory is to be applied generally (i.e., for all of the creditors) or specifically (i.e., in the particular case presented by the creditor). This question was answered recently by the Ninth Circuit Court of Appeals in Ahcom, Ltd. v. Smeding, 2010 DJDAR…

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Did The SEC Really Have Good Cause To Grant Accelerated Approval Of Amendments To NYSE Rule 452?

On September 9, 2010, the Securities and Exchange Commission granted accelerated approval of the New York Stock Exchange’s proposed amendments to Rule 452.   Echoing the Queen of Hearts (“Sentence first – verdict afterwards”), the SEC at the same time announced that it was soliciting comments on the “proposed” rule change.  The NYSE proposed the rule to meet…

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