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CALIFORNIA CORPORATE & SECURITIES LAW

NY District Court Finds That Same Plaintiff In ARS Case Has No California Securities Law Claims

In this Friday the 13th post, I wrote about The Anschutz Corporation’s (TAC) success in having California law apply to its negligent representation claims against the defendant New York rating agencies.  Thus, it may come as a surprise to learn that a different federal district court judge has rejected TAC’s California securities law claims. TAC…

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Court Applies California Common Law To New York Rating Agencies

In another auction rate securities (ARS) case, The Anschutz Corporation (TAC) brought suit against several rating agencies alleging negligent misrepresentation.  The Anschutz Corp. v. Merrill Lynch & Co., Fed. Sec. L. Rep. (CCH) P96,258 (N.D. Cal. March 27, 2011).  District Judge Susan Illston’s opinion is interesting because she tackles the question of whether California or New…

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Is Privity Required Or Not Required Under Section 25500?

California Corporations Code Section 25400 lists a variety of acts that are considered to manipulate the price of securities.  Section 25400 was modeled on Section 9(a) – (e) of the Securities Exchange Act of 1934.  Although Section 25400 declares these acts to be “unlawful”, the statute does not technically impose liability.  The legislature left that duty to…

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Court Rejects Control Requirement For Director Liability

Outside directors and their counsel should take note of yesterday’s decision by the First District Court of Appeal in Hellum v. Breyer.  The case analyzes what a plaintiff must plead in attempting to assert liability against directors of an issuer that has allegedly violated the registration requirements of the Securities Act of 1933 and the…

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In A Securities Fraud Action, The Date Of Filing May Determine Whether You Win Or Lose (And I’m Not Referring To The Statute Of Limitations)

Yesterday, I discussed one-half of the battle in Zalkind v. Ceradyne, Inc. Today, I address the securities law issues raised by Ceradyne’s cross-complaint. To recap, the Zalkinds (Stanley, Elizabeth and a limited partnership that they owned) sold assets to Ceradyne for stock and cash.  The Zalkinds’ suit against Ceradyne for failure to timely register the stock…

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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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