Do Your Bylaws Make Obtaining Waivers Of Notice More Onerous?

Yesterday’s post concerned waivers of notice of shareholders’ meetings under Section 602 of the California Corporations Code.  Although not required to do so, corporate bylaws often parrot the statute.  One popular guidebook, for example, includes the following sample language concerning waivers of notice: The transactions of any meeting of shareholders, either annual or special, however

Why Your Shareholder Meeting Waivers Of Notice May Not Be Up To Snuff

Like other states, California generally requires that whenever shareholders are required or permitted to take action at a meeting, notice of that meeting must be given to the shareholders entitled to vote.  Cal. Corp. Code § 601(a)  However, if notice isn’t given as required, all may not be lost.  Section 601(e) of the Corporations Code provides

DBO Establishes Protocol To Block Unlicensed Payday Lenders’ Ads

When I served as California’s Commissioner of Corporations, Internet commerce was just finding its legs and we were concerned about how to apply the Corporate Securities Law to this new technology.  For state regulators, the challenge has been how to prevent unlicensed activity from entering the state through the Internet.  This week, the Department of

Could The SEC Ask Airlines To Produce Data On Delayed And Canceled Flights?

The following story is fiction.  It was imagined following the SEC’s recently settled action against KBR, Inc. Airlines were caught completely off guard yesterday by SEC letters asking that they produce five years of data on delayed and canceled flights to the nation’s capital. The SEC’s action was a continuation of the agency’s inquiry into

Times May Change But Politicians Don’t

Recently, I’ve been reading about the Greek playwright Euripides.  It is said that Socrates rarely attended plays, but never missed a play by Euripides.  Technology has changed dramatically since the fifth century B.C.E., but it seems that some things don’t change very much at all. In Iphigenia in Aulis, Euripides tells the story of how Agamemnon

Are The SEC’s Canons Of Ethics Written In The Wind And Waves?

It’s easy to be annoyed by the SEC’s failure to comply with clear statutory mandates.  However, not everyone is longanimous.  Oxfam America, for example, has moved beyond irritation to litigation. See Oxfam America Sues The SEC (Again) For Dilatory Rule Making.  Oxfam America’s suit is based on Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Collateral Damage – Should Investors Pay The Price Of Government Sting Operations?

Nearly two years ago, I wrote about a Securities and Exchange Commission enforcement action against a penny stock promoter in San Diego.    There’s nothing particularly unusual about the SEC targeting penny stock fraud.  What made this case interesting was the fact that the investigation appeared to involve the government in criminal stock manipulation.  See Did The FBI Violate The CSL? I

Is Chametz A Good?

The Jewish holiday of Passover begins at sundown this evening.  In preparation for Passover, observant Jews must dispose of absolutely all chametz, which is basically any food that is made with grain and water that has been allowed to leaven (rise).  One way to dispose of chametz, which is also spelt chometz, is to sell it to a non-Jew and

Investors Claim Failure To Qualify Justifies Issuer’s Return Of Investment

The remedy for failure to qualify the sale of a security is either rescission or damages.  Cal. Corp. Code § 25503.  Thus, one typically expects to see investors alleging a failure to qualify as grounds for returning their investments.  In a recent case, however, investors argued that a failure to qualify justified not returning their investments

Welcome To California: No Foreign Corporations Need Apply

California continues to hemorrhage corporate charters to Delaware and Nevada.  The most recent potential emigrant is SJW Corp. which filed this proxy statement last week seeking shareholder approval of a reincorporation from California to Delaware.  Can California and other states stanch the flow by offering licenses only to domestic corporations? Surely, there must be some