Supreme Court Fails To Bite At Bulldog And Oxfam America Sues The SEC
Supreme Court says “no” to Bulldog In March, I wrote that the Bulldog group of funds had asked the United States Supreme Court to determine the constitutionality of Massachusetts’ ban general solicitations in connection with the offer and sale of unregistered securities. Despite representation by Harvard Law School Professor Laurence H. Tribe and an amicus brief from the Cato Institute, Read more...
Crowdfunding – There Will Be Investor Losses
With preternatural sagacity, Yogi Berra once observed that “prediction is very hard, especially about the future”. Although I whole heartedly concur with Mr. Berra’s assessment of the difficulties that inhere in prognistication, I’ve nonetheless decided to make a prediction. My prediction is that after President Obama signs the Jumpstart Our Business Startups Act, there will be investor losses. I feel very safe in this prediction because there Read more...
Shareholder Inspection Rights – Another Nevada “Advantage”?
Thanks to Kevin LaCroix’s The D&O Diary, I was alerted to a recent article by Boris Feldman, a member of Wilson Sonsini Goodrich & Rosati, P.C., in Palo Alto, California discussing developments in class action and other shareholder litigation. Among other things, Boris notes that litigation under Delaware’s stockholder inspection statute, Section 220, has “caught fire” in the last year. He Read more...
Stop SOPA? Hey, It’s Already The Law!
The Stop Online Piracy Act (SOPA), H.R. 3261, has been attracting a lot of attention lately. However, here in California, we’ve been living under the SOPA for better than half a century. The California SOPA is the Securities Owners Protection Act (or Law) which can be found at Corporations Code Section 27000 et seq. The law is generally intended to protect security owners from fraud Read more...
Court Rules That Section 25400 Requires That Manipulative Conduct Occur Within California
Overstock.com, Inc. filed a lawsuit in the San Francisco Superior Court alleging that various investment firms had caused the price of its shares to decline by manipulating the securities markets. Earlier this week, Judge John E. Munter granted summary judgment to four of the defendants. Overstock.com, Inc. v. Morgan Stanley & Co., Inc., Superior Court Case No. CGC-07-460147 (Jan. 10, 2012). Read more...
Warning! The Government May Not Have To Tell You The Truth When It Sells Securities
Last month, the U.S. Treasury issued this press release announcing a secondary public offering of warrants to acquire the common stock of a financial services holding company. The company originally issued the warrants to the Treasury in a private placement under the Capital Purchase Program established by the Treasury as part of its Troubled Asset Relief Program (“TARP”) as authorized by Read more...
Does California’s Anti-Waiver Statute Void Choice Of Forum Agreements?
California Corporations Code Section 25701 is derived from Section 410(g) of the Uniform Securities Act (1956). Section 25701 voids any condition, stipulation or provision purporting to bind any person acquiring any security to waive compliance with any provision of the Corporate Securities Law or any rule thereunder. Does this statute prevent investors from agreeing that disputes will be decided by courts in other states? Earlier Read more...
Ninth Circuit Finds That In Contract Interpretation “Words of a Feather Flock Together”
Yesterday, the Ninth Circuit Court of Appeals issued an opinion that will likely be cited most often for its conclusions regarding scienter, loss causation and Rule 10b-5. WPP Luxembourg Gamma v. Spot Runner, 9th Cir. Case No. 10-55401 (Aug. 23, 2011). Today, however, I’m going to focus the Court’s application of California contract law. The plaintiff generally alleged that the the executives Read more...
SEC Argues That Sales Of Hotel Rooms Are Sales of A Security
In June, I wrote this post about U.S. District Court Judge Dana Sabraw’s opinion in Salameh v. Tarsadia Hotels, 2011 U.S. Dist. LEXIS 30375. The case involved the question of whether ownership interests in individual units of the Hard Rock Hotel San Diego constitute securities under either the investment contract test enunciated by the U.S. Supreme Court in S.E.C. v. Howey, 328 U.S. Read more...
