How Much Is A Whistleblower Waiver Really Worth?

The Securities and Exchange Commission is aggressively interpreting and enforcing its rule against impeding whistleblowers.  Rule 21F-17(a) provides: No person may take any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement (other than agreements dealing with

Which Code Applies When A Stock Certificate Has Been Lost, Destroyed Or Wrongfully Taken?

Capture

Earlier this week, I wrote about Judge Edward M. Chen’s ruling in Sender v. Franklin Res., Inc., 2015 U.S. Dist. LEXIS 171453, 3-4 (N.D. Cal. Dec. 22, 2015).  Judge Chen applied California Corporations Code Section 419 to a Delaware corporation on the basis that the replacement of a lost or stolen stock certificate was not governed

A Whistleblower Isn’t Impeded By The Want Of A Reward

Quite some time ago, I fabulated that airline delays might constitute a violation of Securities and Exchange Commission Rule 21F-17.  That rule provides that no person “may take any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation”.  My theory, albeit fanciful, was that a delayed

Replacement Of Lost Stock Certificate Is Not An Internal Affair, But So What?

U.S. District Court Judge Edward M. Chen recently ruled that a stockholder could maintain an action under California Corporations Code Section 419 for replacement of a lost, stolen or destroyed certificate.  As just described, the ruling shouldn’t be a surprise.  Section 419 provides that if “a corporation refuses to issue a new share certificate or other certificate in

Suspended And Dissolved Corporation Still Defaulted

The story is straightforward; the legal ramifications are not: The plaintiff sued a corporation.  Before the lawsuit was filed, the Secretary of State had suspended the corporation and then the corporation was voluntarily dissolved.  The plaintiff effected service on the designated agent who happened to be an attorney.  The attorney didn’t notify either his erstwhile client

Has The California State Treasurer’s Office Gone Underground?

Late last month, the California State Treasurer’s Office announced a “move to stop ‘Pay-to-Play’ school bond campaigns”.  According to the announcement: [M]unicipal finance firms seeking state business will be required to certify that they make no contributions to bond election campaigns. Firms that fail to do so will be removed from the state’s official list

Rescission And The California Corporations Code

Yesterday, I wrote about an attempt, albeit unsuccessful, to avoid a forum selection clause by a claim of rescission.  The plaintiffs’ in that case, Hatteras Enterprises, Inc. v. Forsythe Cosmetic Group, Ltd., 2016 U.S. Dist. LEXIS 100352 (July 30, 2016), invoked California Civil Code Section 1691, which specifies how a party may rescind.  The grounds for

Which Comes First, Rescission Or Choice Of Forum?

A recent ruling by U.S. District Court Judge Arthur D. Spatt raises the interesting question of whether a choice of law provision can be vitiated by rescission.  The case, Hatteras Enterprises, Inc. v. Forsythe Cosmetic Group, Ltd., 2016 U.S. Dist. LEXIS 100352 (July 30, 2016), involved six separate agreements, each containing a New York choice of law

This Case Caused Me To Take Stock

I recently came across Fukuda v. Nethercott, 2016 U.S. Dist. LEXIS 92462 (D. Utah, July 15, 2016).  The case involved claims by the plaintiff that the defendants had sold him securities in violation of the registration requirements of the Securities Act of 1933 and the Utah Uniform Securities Act.  The issuer of the security was

Donald Trump’s Contribution To Nevada Corporate Law (And My Book)

A signature block in a contract seems like a small thing, but sometimes it can lead to litigation.  When an officer signs a contract, is he signing solely as agent for the corporation or might he also be signing in his individual capacity?  In 1993, future presidential candidate Donald J. Trump faced just that question