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CALIFORNIA CORPORATE & SECURITIES LAW

Judge Alex Kozinski On Debt Versus Equity

Judge Alex Kozinski succinctly frames the debt versus equity battle in this opinion issued yesterday: It’s a timeless and tiresome question of American tax law: Is a transaction debt or equity?  The extremes answer themselves.  The classic equity investment entitles the investor to participate in management and share the (potentially limitless) profits—but only after those…

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More On Disclosure Under SEC Rule 701(e)

As mentioned yesterday, Corporation Finance (often referred to as “Corp Fin”) recently issued a Compliance & Disclosure Interpretation with respect to the disclosure delivery requirements under Rule 701(e).  I find myself befuddled by the following statement in the C&DI: “Once access to the required information has been granted, however, the medium used to communicate the…

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What’s The Plural Of Condominium?

Wednesday’s post was entitled “Condominiums And The California Corporate Securities Law“.  Today’s post concerns whether I used the proper plural form of “condominium”. “Condominium” is derived from the Latin words, cum and dominium.  Cum means with or together and dominium means right of ownership.  Dominium is a neuter noun in the Latin Second Declension, meaning that its plural form is formed by…

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What Is A Foreign Registrant And Why Must They Translate Their Names?

Earlier this week, the Securities and Exchange Commission proposed amendments to Regulation S-K, and related rules and forms.  According to the SEC, these are intended to modernize and simplify certain disclosure requirements in a manner that reduces the costs and burdens on registrants while continuing to provide all material information to investors.  While I view…

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Staff Addresses Family Trusts With Multistate Trustees

When the Securities and Exchange Commission two years ago proposed amendments to Rule 147 and adoption of Rule 147A, I commented on an issue that I foresaw with respect to family and other non-business trusts: Proposed Rule 147 does not address how the residency of non-business trusts should be determined. Many individual investors purchase securities by…

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Multifarious Meanings of “Person”

Last Friday, I observed that the definitions of “person” found in the Securities Act and the Securities Exchange Act are oddly incongruous. The California Corporations Code is similarly inharmonious.  Section 18 of the Code, which applies to the entire Corporations Code unless a provision or context requires otherwise, provides the most compendious and indeterminate definition:…

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Ever Hear Of A Emphyteutic Leasehold?

I have often remarked on the debt that the Anglo-American legal lexicon owes to French and Latin.  Greek has made a much smaller contribution.  In reading Professor Peter Heather’s The Fall of the Roman Empire: A New History of Rome and the Barbarians (Oxford University Press), I came across a legal term of obviously Greek origin that I had…

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Professor Robert J. Jackson Jr. Nominated To Become A Member Of The Securities And Exchange Commission

As Broc Romanek noted yesterday, President Donald Trump has nominated Columbia Law School Professor Robert J. Jackson, Jr. to become a member of the Securities and Exchange Commission.  Over the years, Professor Jackson’s name has made several appearances in this blog, including: Why Commissioner Gallagher Is Not Mistaken On Political Spending Disclosure Political Spending Disclosures –…

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A Permit To Negotiate – Really?

It is sometimes forgotten that the California Corporate Securities Law of 1968 makes it unlawful to either offer or sell a security in California in an issuer transaction unless that the sale has been qualified or exempt from or not subject to qualification.  Cal. Corp. Code § 25110.  Thankfully, the CSL exempts most offers.  Today’s…

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Why Not All Purchasers Are Buyers

Modern English is partially the product of an unnatural grafting of French onto Old English.  It is for this reason that we often find two words for nearly the same thing.  Thus, we call the animal a cow  but the food beef.  The barnyard term is Old English, cu, while the table term is Old French, buef.  This should…

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