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CALIFORNIA CORPORATE & SECURITIES LAW

Ever Wonder Who’s In Charge At The Department Of Business Oversight?

I’m still adjusting to the fact that the Departments of Corporations and Financial Institutions have merged or morphed into the totalitarian sounding Department of Business Oversight.  See DOC and DFI – RIP.  Like each of its predecessors, the new Department is headed by a single Commissioner.  In July, Governor Brown appointed Jan Lynn Owen as the Department’s…

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Ever Wonder What Money Is? California Has Some Answers And I Have Some Questions

Yesterday’s post discussed virtual currencies (e.g., Bitcoin) and the General Corporation’s law prohibition on issuing or putting into circulation money.  But what exactly is money?  The General Corporation Law has no answer.  I’m aware of at least three different California statutes that define “money”. Government Sanction Seems To Be The Sine Qua Non Of Money First, we have the California Uniform Commercial…

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New Law Aims To Make It Easier To Levy On Bank Accounts

Last year, the Consumer Financial Services Committee of the Business Law Section of the California State Bar sponsored AB 2364 (Wagner).  This bill, which took effect on Tuesday, is intended to simplify the process for levying on bank accounts for both creditors and banks.  Until now, a creditor was required to identify and serve separately each branch of a…

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No Complaint Window At Many State Agencies

John Milton is one of my favorite writers.  In his influential defense of freedom of speech, Areopagitica, he linked liberty to the right to complain about the government: [B]ut when complaints are freely heard, deeply consider’d and speedily reform’d, then is the utmost bound of civill liberty attain’d, that wise men looke for. (original spelling)…

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Bank Group Seeks Depublication Of Bank Libel Opinion

In this post, I wrote about a recent decision by the First District Court of Appeal declaring Financial Code Section 1327 unconstitutional on its face.  Summit Bank v. Rogers, 2012 Cal. App. LEXIS 633 (May 29, 2012).  That statute generally makes it illegal to make derogatory comments about a bank.  In this 2010 post, I had…

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June 30 Was The Filing Deadline For Statements By Foreign Lending Institutions

In this March post, I wrote about the problem of indeterminacy created by the legislature’s use of the word “includes” in defining terms in the General Corporation Law.  “Includes” is usually interpreted in statutes and rules as a term of enlargement, not limitation.  Hassan v. Mercy American River Hospital, 31 Cal. 4th 709, 717 (2003).  Thus, one never really knows the…

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District Court Refuses To Apply Business Judgment Rule To Claims Against Officers

Since 2008, a total of 38 banks have failed in California (See this list of failed banks).  When this happens, the Federal Deposit Insurance Corporation acts as receiver for the bank.  Since the FDIC is also an insurer of the failed bank’s deposits, it has an interest in pursuing directors, officers and professionals who were involved in…

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Governor’s Reorganization Plan Strips DOC Of Enforcement Authority

The Governor’s reorganization plan provides for the demotion of the Departments of Corporations and Financial Institutions to the status of divisions within a newly created Department of Business Oversight.  As I discussed in post, the plan is likely to spell the end of the dual charter banking system in California and result in a further…

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Court Declares Bank Trash Talk Statute Facially Unconstitutional

In my October 2010 post “Don’t Talk Trash About A California Bank“, I discussed Financial Code Section 756 (subsequently reenacted verbatim as Section 1327).  That statute generally criminalizes spreading false rumors about a bank.  In my post, I speculated on whether the statute was constitutional: Moreover, it seems that prosecution would invite a claim that…

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Little Hoover Commission Votes To Approve Governor’s Reorganization Plan

Yesterday morning, the Little Hoover Commission voted to approve the Governor’s Reorganization Plan, subject to the members appointed by the Speaker of the Assembly (Mark Vargas) and the Senate Rules Committee (Jonathan Shapiro) reaching agreement on unspecified language in the Commission’s report.  The Plan will take effect unless either house of the legislature adopts by…

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