In 1999, the legislature enacted SB 105 (Burton) which obligates CalPERS and CalSTRS to support, whenever feasible, shareholder resolutions at domestic and international corporations in which those funds have invested that are designed to encourage, among other things: Increased representation of individuals from underrepresented religious groups in the work force, including managerial, supervisory, administrative, clerical, and technical jobs; and Banning of provocative Read more...
Defining “Qualified Client” – Uff Da!
Corporations Code Section 25234 generally prohibits an investment adviser registered in California to be compensated on the basis of a share of capital gains. This prohibition is analogous to the prohibition found in Section 205(a)(1) of the Investment Advisers Act of 1940 (IAA). Congress included this prohibition because it was believed that performance fees might induce advisers in search or higher Read more...
If You Did This, It Would Be Fraud!
All fees, reimbursements, assessments, and other money or amounts charged and collected by the Department are required to be deposited into the the State Corporations Fund. Cal. Gov’t Code § 13978.6(b). The legislature created the fund to “effectively support the Department of Corporations” in its administration of the laws subject to its jurisdiction. Id. In this recent post, I lamented Read more...
Emptores Caveant! Buyer Liability In Securities Offerings
Much of the focus of securities litigation is on the liability of sellers, but what about buyers? Can buyers prevaricate with impunity? Corporations Code Section 25401 prohibits misstatements and omissions of material facts. Section 25401 explicitly covers persons who “buy” or who “offer to buy” a security. California’s insider trading statute, Section 25402, also reaches purchases. Although not California cases, two Read more...
CalPERS Discusses Adoption Of “Investment Beliefs”
The last agenda item for Monday’s meeting of the Investment Committee of the Public Employees’ Retirement System was an ongoing ”Discussion of Investment Beliefs”. No, this wasn’t a theological discussion. For the last two years, the CalPERS investment office has been involved in discussions about developing a set of “investment beliefs”. Last fall, CalPERS even retained a consultant to assist in Read more...
Court Of Appeal Holds Section 25504 And Section 15 Claims Are Bis In Idem
Section 15 of the Securities Act of 1933 imposes liability on control persons for violations of Sections 11 and 12 of that act. Section 25504 of the California Corporations Code imposes liability on persons who control persons liable under either Section 25501 (liability for violation of Section 25401 (false statements or omissions) or Section 25503 (liability for failure to qualify). Do these Read more...
King Lear And The California Courts
This weekend, I watched the Oregon Shakespeare Festival’s production of King Lear in beautiful Ashland, Oregon. Thus, my thoughts are on the Bard today. It turns out that the play is no stranger to several recent California opinions. For example, Justice William W. Bedsworth of the Fourth District Court of Appeal began Estate of Giraldin, 199 Cal.App.4th 577 (2011) with the following: Read more...
Court Of Appeal Validates Contractual Choice Of Venue
In this November of 2010 post, I considered whether venue selection agreements are valid in California. I noted that the California Supreme Court had held that venue selection provisions are void. General Acceptance Corp. v. Robinson, 207 Cal. 285, 289 (1929). I also noted two more recent decisions by the Courts of Appeal that appear to follow the holding in General Acceptance: Alexander v. Superior Court, Read more...
The NSMIA Didn’t Lay A Preemptive Finger On These Transactions
Last week, I was in Washington D.C. where I served as the moderator of a panel discussion on current securities law issues for small business. As part of my presentation, I discussed the following list of securities transactions that have not been preempted by the National Securities Markets Improvement Act of 1996 (aka the NSMIA): Offers and sales made pursuant to Read more...
Ninth Circuit Holds Private Company Rules Preempt California Law
California’s Statutory Prohibition on Forced Patronage California Labor Code Section 450(a) forbids employers from coercing the patronage of their employees: It provides: “No employer, or agent or officer thereof, or other person, may compel or coerce any employee, or applicant for employment, to patronize his or her employer, or any other person, in the purchase of any thing of value.” Read more...
