Senate Appropriations Committee Is Next Stop For California Finders Bill

AB 667 (Wagner) continues to wend its way through the California legislature.  The bill, which was sponsored by the Corporations Committee of the Business Law Section of the California State Bar, defines a finder as a natural person who, for direct or indirect compensation, introduces or refers one or more accredited investors, as that term

Uniform Voidable Transactions Act Becomes Law (Almost)

On June 2, 1897, the New York Journal famously quoted Samuel Clemens (aka Mark Twain) as saying “The report of my death was an exaggeration”.   This widely quoted (and misquoted) denial was a riposte to a story that appeared the day before in the New York Herald about the author’s imminent demise.  I had a similar

Could This Really Be The Origin Of Due Process?

On Monday, I wrote about the upcoming 800th anniversary of the Magna Carta.  The California Assembly recently took note of the upcoming octocentennial and is considering adoption of a commemorative concurrent resolution.  The resolution, ACR 76, provides a fairly accurate description of the historical events and key clauses of the Magna Carta.  However, I do

Assembly Committee Seeks To Fix Securities Fraud Statute

Readers of this blog will be familiar with my criticism of the 2013 amendment of California’s basic securities fraud statute, Corporations Code Section 25401.  See California Creates Complete Chaos By Rewriting Anti-Fraud Statute, But “We Are Against Fraud Aren’t We?”, Die Verwandlung: How The Legislature Likely Raised The Bar On Securities Fraud Actions, When California Copied Rule

I understand Chair, Chairperson, Chairman and Chairwoman But Not Chairwomen of the Board

In February, I posted this little rumination on the origin of the term “chairman”.  Then I came across SB 351 introduced late last month by the California Senate Committee on Banking and Financial Institutions.  Currently, Sections 5213, 7213 and 9213 of the California Corporations Code each provides that a corporation must have “a chair of the

To Conjoin Or Not To Conjoin – California Sometimes Gets It Wrong

This is as an easy mistake to make.  I say so because I’ve made it more than once.  The name of the landmark Depression era legislation regulating our national securities markets is the Securities Exchange Act of 1934; the name of the regulator is the Securities and Exchange Commission.  Compare Sections 1 and 4 of 48

A Bad Review For California’s New Non-Disparagement Law

The advent of social media has dramatically lowered the cost to consumers of acquiring and disseminating information.  Formerly, only a handful of people might hear about a bad experience with a retailer or service provider.  Now, it’s possible for a consumer to kvetch online before an audience of millions.  Whether consumer criticisms are accurate and justified or false and

This Legislative Lacuna Looms Large In RULLCA

I expect that most limited liability company operating agreements specify how profits and losses are to be allocated among members.  Sometimes, they may not.  The now repealed Beverly-Killea Act provided a default provision for just this contingency, former Corp. Code § 17202.  A similar default rule can be found in the California Revised Uniform Limited Partnership

Is This Proposed Amendment To Delaware’s Stockholder Consent Statute Really Needed?

Recently, I wrote about a proposal to amend Section 141(f) of the Delaware General Corporation Law to permit inchoate directors to take action by written consent.  The Corporation Law Section of the Delaware State Bar is proposing a parallel amendment to Section 228(c) of the DGCL to allow for springing stockholder consents.  The proposed amendment

Senator Levin Aims Again To Require Private Companies To Report Beneficial Ownership

In July, I wrote about a white paper prepared by the states of Delaware, Nevada and Wyoming, Encouraging Business While Fighting Fraud.  The report details state efforts to deal with the use of corporations and limited liability companies to facilitate criminal and terrorist activities.  The report mentions Senator Carl Levin’s efforts to enact federal legislation to