Court Applies Safe Harbor Doctrine To CA Transparency in Supply Chains Act

I first wrote about the California Transparency in Supply Chains Act more than four years ago.  See California To Require Website Disclosure Regarding Efforts To Eradicate Slavery And Human Trafficking.  At the time, I noted that “The Act provides that the exclusive remedy for a violation is a suit for injunctive relief brought by the California Attorney General.”

Preemption Of Secondary Trading Is Fast Becoming More Obscure

Secondary trading of securities in California must be qualified unless exempt or not subject to qualification due to federal preemption.  Cal. Corp. Code § 25130.  Similarly, the offer and sale of securities are subject to registration under the Securities Act of 1933 unless exempt.  Sections 4(a)(1) and 4(a)(3) of the Securities Act are the exemptions

Initiative Measure Aims To Retard Gut And Amend Legislation

A reader of the California Constitution would be lead to believe that the course of legislation is orderly and predictable.  Under Article IV, Section 8(b), the legislature may make no law except by statute and no statute except by bill.  Every bill, moreover, must have a single subject and that subject must be expressed in

Section 12(g)(1)(A) – How The SEC Is Putting Words In Congress’ Mouth

Section 501 of the Jumpstart Our Business Startups (JOBS) Act amended Section 12(g)(1) of the Securities Exchange Act of 1934 to increase the thresholds for mandatory registration of a class of equity securities.  The Securities and Exchange Commission describes the amendment as follows: The holders of record threshold for triggering Section 12(g) registration for issuers

Sellers May Find The FAST Act To Be Not So Fast


I’ve devoted several recent posts to the new secondary trading exemption that Congress tacked on to Section 4 of the Securities Act of 1933.  The exemption is poorly drafted and in many cases may prove unusable.  Perhaps this reflects its provenance as part of a large bill devoted primarily to transportation matters – the Fixing

Congress’ Strange New Secondary Trading Exemption

Yesterday’s post introduced new Section 4(a)(7) of the Securities Act of 1933, as added by the Fixing America’s Surface Transportation Act or the “FAST Act”.  Boiled down to the essentials, this is a secondary trading exemption.  This is made clear by Section 4(d)(7) which is captioned “Issuers Disqualified”: The transaction is not for the sale of a

Strawberries and Raspberries – Truly Strange Bedfellows

When I served as Deputy Secretary and General Counsel of the California Business, Transportation & Housing Agency, the Departments of Transportation and Corporations were part of that agency.  As a result, my days often involved a concatenation of transportation and securities law legislative issues.  After leaving government service, I didn’t expect to see this unusual pairing

Why Courts Should Give The Legislature The Benefit Of The Doubt

Like many others, I’m a huge fan of Justice William W. Bedsworth’s column, “A Criminal Waste of Space”.  Today’s post was inspired by Justice Bedsworth’s most recent column bemoaning the misplaced instinct of lawyers from their nonage to their dotage to give the benefit of the doubt: In 2002, I wrote an opinion reversing a conviction for escape from a juvenile

NASAA Mistakes The Principal

I have frequently commented on the fact that many so-called “investor protections” have the unintended consequence of increasing the risk of investor losses.  One example is limitations on resales.  An illiquid security presents greater risk than a liquid security.  Investors understand this and will apply an illiquidity discount to the price of a security.  In this

Just When Does That Law Take Effect?

The California legislature sits in a two-year session known as a biennium.  The current session is the 2015-2016 session.  The first year of the session ended on September 11, 2015.  That was the last day for the legislature to pass bills.  Joint Rule 61(a)(14). The legislature’s passage of a bill does not necessarily mean that