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CALIFORNIA CORPORATE & SECURITIES LAW

Misery (Taxes) Acquaints A Court With Strange Bedfellows (Sections 83 and 16(b))

Yesterday, the Ninth Circuit Court of Appeals issued an opinion in a federal tax refund suit that spends a surprising amount of time discussing whether the plaintiff could be subject to suit under Section 16(b) of the Securities Exchange Act of 1934. In Strom v. United States (9th Cir. Case No. 09-35175, Apr. 6, 2011), the…

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No Rescission Without Privity

California Corporations Code Section 25401 declares unlawful the sale or purchase of a security by means of a written or oral communication that includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were…

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Supreme Court Weighs Opening The Janus Gate of Secondary Liability

The Supreme Court heard oral arguments in Janus Capital Group, Inc. v. First Derivatives Traders on Tuesday.  You can read the transcript here.  The SCOTUSblog posts transcripts of oral arguments.  If you are not up to reading the entire transcript, Jim Hamilton’s World of Securities Regulation posted this summary.  Mark Perry, on behalf of the…

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CCP § 1029.8: “Let Him Make Treble Satisfaction”

Recently, I’ve been writing about Section 25501.5 of the California Corporations Code, which was added to the Corporate Securities Law of 1968 by AB 2167 (Correa).  That wasn’t the only statutory change effected by AB 2167, however.  AB 2167 also amended California Code of Civil Procedure § 1029.8 and that amendment should be of particular interest to unregistered…

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A Modern Council Of Nicaea – Supreme Court Hears Oral Arguments In Janus Today

In this September post, I compared the petitioner’s arguments in Janus Capital Group, Inc.v. First Derivative Traders to the Arian controversy debated at the Council of Nicaea.  Today, the Supreme Court will hear oral arguments on the case.  If you are interested in reading up on the arguments, you can find links to the briefs…

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Section 25501.5 – What Do It Mean?

In 2004, the California Legislature added Section 25501.5 to the Corporate Securities Law of 1968.  Ever since then, I’ve been asked “What do it mean?” Corporations Code Section 25501.5 generally authorizes an action for rescission (or damages, if the security is no longer owned) by any person “who purchases a security from or sells a security to a broker-dealer…

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Ninth Circuit Declares No General Alter Ego Claim Exists In CA Law

When alter ego is alleged, the question may arise as to whether the theory is to be applied generally (i.e., for all of the creditors) or specifically (i.e., in the particular case presented by the creditor). This question was answered recently by the Ninth Circuit Court of Appeals in Ahcom, Ltd. v. Smeding, 2010 DJDAR…

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California Is The Largest Issuer In The United States

On September 21, 2010, the Securities and Exchange Commission held its first in a series of hearings concerning the municipal securities markets.   California Treasurer Bill Lockyer submitted these written remarks.  In these remarks, the Treasurer mentions that last year California was “the largest issuer in the nation including corporate issuers” (with certain footnoted exceptions). In…

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Victims of Corporate Fraud Fund

In the waning days of the 2001-2002 legislative session, then Assemblymember Kevin Shelley gutted and amended AB 55.  As introduced, AB 55 would have amended the Elections Code.  Instead, AB 55 became the vehicle for the enactment of the deeply flawed California Corporate Disclosure Act. In the ensuing years, most practitioners and their clients have…

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