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CALIFORNIA CORPORATE & SECURITIES LAW

Placement Agent Bill to be Heard Today

Earlier this year, Assemblymember Edward Hernandez introduced AB 1743 to require placement agents who assist in obtaining business from California public retirement systems, such as CalPERS and CalSTRS, to register as lobbyists.  Although there are a number of consequences to being classified as a lobbyist, the one that has attracted the most attention is the…

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The Alter Ego Doctrine Yields Conflict of Interest

American journalist Ambrose Bierce defined a corporation in his The Devil’s Dictionary as “an ingenious device for obtaining individual profit without individual responsibility”.  The alter ego doctrine is one tool that the courts use to address a perceived want of individual responsibility on the part of a corporate owner. In most cases, creditors try to use…

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Furlough Fridays Once More

The State of California still has no budget and Governor Schwarzenegger has been stymied for the time being in reducing state workers to the federal minimum wage.  As reported by Shane Goldmacher in this Los Angeles Times story, Governor Schwarzenegger has issued another executive order requiring most California state workers to take the second, third…

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What is a Venture Capital Fund?

Section 407 of the Dodd-Frank Wall Street Reform and Consumer Protection Act creates a new exemption from federal registration for investment advisers if all their investment advice is limited to one or more “venture capital funds”.  Congress, however, did not say what a “venture capital fund” was.  Rather, Congress told the Securities and Exchange Commission…

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Golden State Private Placements

If you need a good summary of federal and state securities laws governing private offerings in California, Lee Petillon has written an excellent article for the 2010 Issue No. 2 of the Business Law News.  The Business Law News is the official publication of the Business Law Section of the California State Bar.  Lee’s article covers, among other topics, SEC…

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More About the Effectiveness of Section 413(a)

Yesterday, I wrote about the Compliance & Disclosure Interpretation (“C&DI”) issued last week by the staff of the SEC’s Division of Corporation Finance.  In the C&DI, the staff clearly takes the position that the exclusion of an investor’s primary residence from the calculation of net worth takes effect immediately. My own view is that Section…

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SOS Changes Document Certifications

Historically, the California Secretary of State has certified copies of filed documents by attaching a separate cover page.  Last week, the Secretary of State announced that effective July 23, 2010 her office would stamp the back of the last page of the instrument being certified in lieu of providing a separate cover page.  The stamp will contain the…

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Life Settlement Contracts Are Securities in CA

Broc Romanek also mentions in his blog today that the Securities and Exchange Commission issued a task force report on life settlement contracts.  Among other things, the task force recommends that Congress amend the definition of “security” under the federal securities laws to include life settlements.  The task force defines a “life settlement” as “a…

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What if There is No Deficiency?

Yesterday, Broc Romanek reported that the staff of the SEC’s Division of Corporation Finance has issued a new Compliance & Disclosure Interpretation addressing Section 413(a) of the Dodd-Frank Act.  Section 413(a) requires the SEC to adjust the definition of “accredited investor” in its rules under the Securities Act of 1933.  In the first four years…

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Shareholder Approval of Political Contributions – Coming Soon?

On June 22, 2010, I posted an item concerning AB 919 (Nava), a California bill that would require corporations to report political contributions to shareholders and make refunds to those shareholders who don’t agree.  In today’s Proxy Season Blog, Therese Doucet writes about similar legislative efforts in New York, Massachusetts and even in Congress.  Broc…

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