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CALIFORNIA CORPORATE & SECURITIES LAW

This Definition Of A Factor May Surprise You

The creditable H.W. Fowler described “factor” as “one of those words . . . which are so popular as thought-saving reach-me-downs that all meaning is being rubbed off them by constant use.”  Fowler’s Modern English Usage (2d ed. p. 184). When I think of factoring in the legal sense, I think of someone who is engaged…

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10th Circuit Holds SEC ALJs Are Holding Office Unconstitutionally

In March 2015, I posed the following question: But if you were hailed before an unconstitutional tribunal with the ostensible authority to fine you and bar you from working, would you want a “real” court to step in and consider the constitutionality of the proceedings? Since raising that question, several respondents in administrative proceedings brought by…

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When Partnership “Members” Are Employees

Last week, I wrote about how AB 2883 changes the definition of “employee” vis-a-vis corporate directors.  See Is A Corporate Director An Employee Subject To Workers’ Compensation?  AB 2883 also rewrites the definition of “employee” for purposes of partnerships and limited liability companies.  Effective January 1, 2017, an “employee” for purposes of California’s workers’ compensation law…

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California Secretary Of State Upgrades Business Searches

For some time, the California Secretary of State’s office has offered a business search application on its website.  Although the function provided only limited information, the application received more than 5 million views per month.  On St. Lucia’s day, the Secretary of State announced a new and improved search application. From my perspective, one of the…

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Has The SEC Paid Millions In Whistleblower Bounties To “Friends And Family”?

Earlier this month, the Securities and Exchange Commission announced yet another large whistleblower bounty.  See SEC Awards Nearly $1 Million to Whistleblower.  This brings to $136 million the total amount awarded to date by the SEC to whistleblowers.  That is a lot of money, especially since it went to only 37 individuals! Were any of those awards made to…

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Pay By Another Name Might Be Salt

Yesterday’s post concerned the classification of directors and officers as employees for purposes of California’s workers’ compensation law. Effective January 1, 2017, California Labor Code Section 3351(c) will define “employee” to include all “officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay” (read…

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Is A Corporate Director An Employee Subject To Workers’ Compensation?

  Corporate lawyers tend to believe that directors and officers are not ineluctably employees.  Thus, it may come as a surprise that California’s workers’ compensation law has for some time defined an “employee” to include officers and directors: All officers and members of boards of directors of quasi-public or private corporations while rendering actual service…

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SEC Takes Action Because Issuer Did Not Effect A Public Offering

Until the addition of paragraph (c) to Rule 506 three years ago, securities lawyers spent a lot of time advising their clients on how to avoid a public offering of their securities.  Thus, I found it somewhat ironic to read that the Securities and Exchange Commission had taken enforcement action against a California lawyer for not conducting…

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Congress Voids Form Contract Provisions That Impede Consumer Reviews

To paraphrase William Somerset Maugham’s Of Human Bondage, businesses may ask you for a review, but they only want praise.  Indeed some businesses have tried to ensure only good reviews by including non-disparagement clauses in their consumer contracts. Two years ago, I wrote about a new California law intended to protect reviews of consumer products…

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What Are Protestants Doing In The California Water Code?

The California Water Code makes numerous reference to “protestants”.  Secularists need not fear.  The reference isn’t to adherents of the reformation theologies of Martin Luther, John Calvin or Huldrych Zwingli.  These are small “p” protestants, that is persons who are pursuing a protest. Section 1333, for example, provides “The protestant and the applicant shall make…

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