Supreme Court To Decide If It Will Decide Whether Section 16 Plaintiff Has Constitutional Standing
No Harm, No Foul The late Lakers broadcaster Chick Hearn was known for coining or popularizing numerous basketball expressions, including “air ball” and ”no harm, no foul”. Now, the U.S. Supreme Court may soon decide whether the principle of “no harm, no foul” applies to Section 16, the other insider trading statute. Do Section 16 Plaintiffs Suffer Injury In Fact? In 2009/2010, Read more...
No Happy Trails For Victorville Tax Increment Bond Financing
For more than thirty years, I’ve driven by, but never stopped at, the Roy Rogers and Dale Evans Museum in Victorville, California. The museum eventually relocated to Missouri but reportedly did not survive for long. Despite this notable defection, Victorville has grown remarkably in the last three decades. Unfortunately, it now finds itself accused of a variety of securities law Read more...
Emptores Caveant! Buyer Liability In Securities Offerings
Much of the focus of securities litigation is on the liability of sellers, but what about buyers? Can buyers prevaricate with impunity? Corporations Code Section 25401 prohibits misstatements and omissions of material facts. Section 25401 explicitly covers persons who “buy” or who “offer to buy” a security. California’s insider trading statute, Section 25402, also reaches purchases. Although not California cases, two Read more...
Court Of Appeal Holds Section 25504 And Section 15 Claims Are Bis In Idem
Section 15 of the Securities Act of 1933 imposes liability on control persons for violations of Sections 11 and 12 of that act. Section 25504 of the California Corporations Code imposes liability on persons who control persons liable under either Section 25501 (liability for violation of Section 25401 (false statements or omissions) or Section 25503 (liability for failure to qualify). Do these Read more...
What Happens When Some Investors Agree To Arbitration But Others Don’t?
Arbitration continues to be a hot topic for the courts. See Achilles’ Shield And Judicial Review Of Arbitration Awards and U.S. Supreme Court Holds That State Courts Must Not Assume The Arbitrator’s Role By Declaring Non-Compete Agreements Null And Void. Yesterday, the Fourth District Court of Appeal tackled the question of what happens when some investors agree to arbitrate their claims Read more...
Federal Court Upholds Delaware Forum Selection Notwithstanding California Securities Law Claims
Corporations Code Section 25701 is California’s anti-waiver statute. It provides that “Any condition, stipulation or provision purporting to bind any person acquiring any security to waive compliance with any provision of this law or any rule or order hereunder is void.” What impact, if any, does this have on a forum selection agreement? Three decades ago, the California Court of Read more...
Where Have All The CAFA Notices Gone?
On February 18 2005, Congress enacted the Class Action Fairness Act (CAFA), P.L. No. 109-2 (28 U.S.C. §§ 1332(d), 1453, and 1711 – 1715). In enacting the CAFA, Congress sought to protect consumers and investors from settlements in which plaintiffs’ attorneys received significant fees but class members received little or even less. In one (in)famous case, for example, an unfortunate class member incurred $91.33 Read more...
Does Every 10% Owner Owe A Fiduciary Duty To The Corporation?
If I told you that all 10% owners owe a fiduciary duty to the corporation, I’d be surprised if you weren’t surprised. However, that was, in fact, the holding of the Second Circuit Court of Appeals last October in Donoghue v. Bulldog Investors General Partnership, 696 F.3d 170 (2d Cir. 2012): Thus, pursuant to § 16(b), when a stock purchaser chooses Read more...
California’s GO-Biz Site Bedeviled By Errors and Omissions
According to the website, the California Governor’s Office of Business and Economic Development (GO-Biz) was created ”to serve as California’s single point of contact for economic development and job creation efforts”. While the site does provide some very basic level of information, it is dangerously incomplete and riddled with manifest errors. No advice would be better than bad advice. “It Sounds Read more...
Court Rules Law Firm That Drafted Documents Was Not A Seller Of Securities
Section 25400(d) of the California Corporations Code declares it unlawful for any broker-dealer or “other person selling or offering for sale” to make a false or misleading statement for the purpose of inducing the purchase or sale of a security if that person knew or had reason to know that the statement was false or misleading. Corporations Code Section 25500, Read more...
