Website Heading

CALIFORNIA CORPORATE & SECURITIES LAW

Are Limited Liability Companies “Persons”?

Limited liability companies did not exist when Congress enacted the Securities Act of 1933 and the Securities Exchange Act of 1934.  Therefore, it should be no surprise that as originally enacted these acts did not mention LLCs.  Congress has since amended both acts and references to LLCs can now be found in both acts.  Section…

Share on:

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…

Share on:

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 –…

Share on:

Something Appears To Be Awry With California’s Insider Trading Statute

I trust that by now most quotidian readers of this blog should be familiar with Corporations Code Section 25402 which declares insider trading to be unlawful.  Although the statute has been on the books since the enactment of the Corporate Securities Law of 1968, it doesn’t make a great deal of sense.  Here’s the unabridged text of the statute: It is…

Share on:

Scienter In The News Again

In May, I wrote about Judge Gonzolo P. Curiel’s  decision to grant the defendants’ motion to dismiss federal and state securities law claims in Mueller v. San Diego Entm’t Partners, LLC, 2017 U.S. Dist. LEXIS 77643 (S.D. Cal. May 22, 2017).  I pointed out that Judge Curiel had ruled that scienter is required under Corporations Code Section 25401 but…

Share on:

“Lead Independent Director” Or “Presiding Director”?

Neither California nor Nevada require that a corporation have either a “lead independent director” or “presiding director” and yet many corporations state that they have such a position.  Why? Item 407(h) of Regulation S-K requires that if one person serves as both principal executive officer and chairman of the board, a company must disclose whether it has a “lead…

Share on:

Bylaws And Supermajority Board Voting Requirements

Yesterday’s post concerned various provisions that, although not required to be included in the articles of incorporation, must be included if they are to be effective.  One of these provisions relates to supermajority voting requirements: A provision requiring, for any or all corporate actions (except as provided in Section 303 [removal of directors without cause],…

Share on:

Putting These Provisions In Bylaws Won’t Be Sufficient

Section 202 of the California Corporations Code lists those provisions that must be included in a California corporation’s articles of incorporation in order for them the be accepted by the Secretary of State for filing.  There are a number of other provisions that although not required to be included in the articles won’t be effective…

Share on:

Still More On Suing The CEO For Social Activism

Last week, I devoted several posts to the question of suing the CEO for social activism.  The catalyst for the discussion was an August 17, 2017 Op-Ed piece by Jon L. Pritchett and Ed Tiryakian in The Wall Street Journal.  That piece cited recent CEO resignations from the White House’s Council on Manufacturing and Target’s adoption…

Share on:

Shareholder Derivative Suit Or Derivative Action?

I have long puzzled over the question of which is correct – “derivative suit” or “derivative action”?  Historically, the term “suit” was used for proceedings in equity.  California courts have generally regarded shareholder derivative claims as equitable.   Nelson v. Anderson, 72 Cal. App. 4th 111, 127, 84 Cal. Rptr. 2d 753, 763 (1999).  Thus, one might…

Share on: