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CALIFORNIA CORPORATE & SECURITIES LAW

Consumer Loan, Commercial Loan or Neither?

The California Finance Lenders Law imposes a licensing requirement on persons engaged in the business of a finance lender.  Cal. Fin. Code § 22100(a).  Chapter 2 of the CFLL imposes a host of requirements on “consumer loans” and Chapter 3 imposes a few requirements on “commercial loans”.  Thus, it is important for a finance lender…

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After 25 Years, Delaware Begins To See The Light

A quarter century ago, I wrote a brief piece criticizing how Delaware handled stockholder action by written consent: Another difficulty with section 228 arises from its focus on the date of the “earliest dated consent delivered” to the corporation.  The emphasis on the date of the consent in section 228 contrasts markedly with the focus…

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“And” Or “Or” – This Ninth Circuit Opinion Highlights The Difference

“And” and “or” are classified as conjunctions. They are classified as such because they yoke together words, phrases, clauses and sometimes even sentences.  They are not interchangeable, however, as illustrated by the recent opinion by the Ninth Circuit Court of Appeals in Zetwick v. County of Yolo, 2017 U.S. App. LEXIS 3260 (9th Cir. Cal. Feb.…

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Why Bassam Salman Should Not Have Been Convicted

A lot of ink has been spilt on the United States Supreme Court’s decision in Salman v. United States, 137 S. Ct. 420 (2016).  In that case, the Supreme Court upheld the criminal conviction of Mr. Bassam Salman who received lucrative trading tips from an in-law, who had received the information from his brother.  The legal issue in…

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Can It Be That California, “The Biggest Loser” Is Also Number One?

In February, I published a post entitled Is California “The Biggest Loser”.  My reference was to Professor Lynn LoPucki’s finding that “California, home to 1,210 [public] companies but state of incorporation for only 112, is the biggest loser”.  However, California is not last in all things.  SEC economists Drs. Vladimir I. Ivanov and Anzhela Knyazeva recently issued a…

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Exactly What Part Of “To The Commission” Is Ambiguous?

The Dodd-Frank Act gave us many things, including Section 21F of the Securities Exchange Act of 1934.  Section 21F, prohibits employers from retaliating against a “whistleblower”.  15 U.S.C. § 78u-6(h)(1)(A).  We need not guess about the definition of “whistleblower” because Congress conveniently provided the following definition: . . . any individual who provides, or 2 or more…

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Does Whistleblower Protection Extend To Disclosures To Your Mom Or The Press?

California and federal law establish ample protections for whistleblowers.  These protections can be found in numerous laws, including the Sarbanes-Oxley Act, the Dodd-Frank Act, and Section 1102.5 of the California Labor Code.  Whistleblowing typically involves the disclosure of someone else’s confidential information and that disclosure may constitute the breach of a confidentiality agreement.  Thus, a…

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Professor Bainbridge On My “Beef” With Gantler v. Stephens

Professor Stephen Bainbridge yesterday provided a well considered assessment of my “beef” with the Delaware Supreme Court’s holding in Gantler v. Stephens, 965 A.2d 695, 709 (Del. 2009) that “the fiduciary duties of officers are the same as those of directors”.  To the extent that Professor Bainbridge is saying that officers are not agents “pure and simple”. …

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Finance Lenders Annual Report Deadline Is Nigh

Lenders and brokers licensed under the California Finance Lenders Law must file an annual report by the Ides of March (i.e., March 15) of each year.  Cal. Fin. Code § 22159.  This is a hard deadline and the Department of Business Oversight does not grant extensions.  The consequences of failure to the file the report can…

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Why An Understanding Of Officers As Agents May Be Important

In several recent posts, I have noted that officers, unlike directors, are agents of the corporation.  Recognizing the agency status of officers can affect the legal analysis in a number of significant ways, including: Choice of law.  California Corporations Code Section 2116 explicitly provides that the law of the jurisdiction of incorporation applies to the…

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