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CALIFORNIA CORPORATE & SECURITIES LAW

Commissioner DuFauchard Proposes Broker-Dealer Safe Harbor Rule

In 2007, a California Court of Appeal held that corporate officers and directors may be subject to licensure as broker-dealers unless they receive a commission for the sale of securities.  People v. Cole, 156 Cal. App. 4th 452 (2007).  Although the court’s holding should be viewed in the context of the unique facts of that…

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Enforcing this Bylaw Could Land You in Jail!

Out-of-state practitioners are frequently surprised by some of California’s laws, but I’m guessing that very few, if any, California lawyers are familiar with Business & Professions Code Section 16801. That section provides in part: It is unlawful for any corporation organized under the laws of this State [i.e., California], or the board of directors, trustees,…

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Supreme Court Set to Decide Constitutionality of the PCAOB

Although this blog is dedicated to California corporate and securities law topics, I couldn’t resist a post regarding this pending decision.  At the Supreme Court session this morning announcing opinions, the Chief Justice confirmed that the Court will complete its work next Monday and go into recess until the Fall term.  Among the four cases argued…

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Court of Appeal Applies Delaware Law to Sustain Demurrer to California Action

In the last few weeks, the various appellate districts of the Court of Appeal have been pumping out corporate law opinions.   The most recent, Fox v. JAMDAT Mobile, Inc., involves a stockholder lawsuit against a Delaware corporation, JAMDAT, and its directors for breach of fiduciary duty.  Unlike Kruss v. Booth (See June 22, 2010 Blog), the…

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Appellate Court Finds Triable Issues of Fact in Alter Ego Claim

The Sixth District Court of Appeal recently addressed what it takes for someone to beat an alter ego claim on a motion for summary judgment.  In Zoran Corp. v. Chen, the plaintiff sued several companies and an individual for amounts owed to the plaintiff for equipment that it had sold.  A central theory of the complaint…

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CalPERS’ Proposed Placement Agent Disclosure Rule Likely to be Amended

Last year, the California legislature enacted AB 1584 as an urgency measure. That legislation required the retirement boards of each public pension or retirement system to develop and implement, on or before June 30, 2010, a policy requiring the disclosure of payments to placement agents. CalPERS had previously adopted a disclosure policy but had not…

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California Appellate Court Decides California Law Applies “For Now” to Shareholder Derivative Suit Against Directors of a Nevada Corporation

Kruss v. Booth is a “must read” for lawyers confronting Section 2115 of the California Corporations Code. Section 2115 represents the California legislature’s attempt to thumb its nose at the internal affairs doctrine. That doctrine holds that the internal affairs of a corporation should be governed by the law of the state of incorporation. Section…

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California Legislature Takes On Citizens United by Proposing to Require Refunds to Shareholders Objecting to Political Expenditures

The California legislature has reacted to the Supreme Court’s decision in Citizens United v. Federal Election Commission, 558 U.S. 50 (2010) by gutting and amending AB 919 (Nava).  That bill started out life last year as a “spot” bill.   A “spot” bill is a bill that makes a very inconsequential change to a statute…

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