Revealed! The Investor Advisory Committee’s Recommendations On Lifting The General Solicitation Ban In Rule 506 Offerings

I was not the only one who was perturbed by the Investor Advisory Committee’s procedures for considering the Securities and Exchange Commission’s proposed rulemaking to lift the ban on general solicitation and Advertising in Rule 506 offerings.  Niels Holch, the Executive Director of the Coalition of Mutual Fund Investors, submitted this comment letter that concludes:

Who Opens And Closes The Polls?

One of the seemingly routine matters at stockholder meetings is the opening and closing of the polls.  Sometimes, votes are close and the outcome of a vote may turn on whether the polls are closed “early” or “late”.  For a real-life example, see In re Carver Bancorp, Inc., 2000 Del. Ch. LEXIS 12 (Aug. 28, 2000) (Shares

Government In The Shadows

Last Friday, I lamented the inadequacy of the notice given by the Investor Advisory Committee for the Securities and Exchange Commission.  Not only was notice very short – three days; it requested comments on materials unavailable to the public – the recommendations of a subcommittee with respect to the Jumpstart Our Business Startups (JOBS) Act requirements on

Court Holds Promoters May Owe Fiduciary Duties To Non-Shareholder Investors And A Lamentable Example Of Notice

Yesterday, the California Court of Appeal issued an opinion addressing two important questions involving the liability of corporations and promoters  Cleveland v. Johnson, Cal. Ct. of Appeal Case No. B233762 (Oct. 11, 2012).  The facts of the case are somewhat complicated, but can be distilled to the following elements.  The plaintiffs invested money in a proposed

What If The Police Received A Bonus For Every Ticket They Wrote?

I’ve been attending (and speaking as a panelist at) the National Association of Stock Plan Professionals (NASPP).  One of the panels discussed the important, but arcane topic of state unclaimed property (aka escheat) laws.  Coincidentally, Volume 5, Issue #3 of the California Controller’s Unclaimed Property Newsletter arrived in my inbox this same week. California’s unclaimed

To The SEC, “Risk” Is A Four Letter Word.

I’ve been attending the 7th Annual Proxy Disclosure Conference sponsored by &  One of the topics of this very comprehensive program has been the SEC’s requirement that companies disclose their compensation policies and practices as they relate to the registrant’s risk management. Item 402(s) of Regulation S-K.  As I listened to the panelists,

No Seat At The Table For Stockholders At Directors’ Meetings?

Practitioners who deal with multi-member commissions and boards here in California are likely to have heard of this state’s open-meeting law – The Bagley-Keene Open Meeting Act, Government Code Sections 11120-11132.  The Act includes a surprisingly libertarian statement of legislative intent: The people of this state do not yield their sovereignty to the agencies which serve them.

Dummy Officers Are A Dumb Idea

If you incorporate a corporation in Nevada, you will be required to file an annual list of officers and directors with the Nevada Secretary of State.  NRS 78.150(c).  There is nothing terribly unusual about this.  California has a similar requirement.  Cal. Corp. Code § 1502.  As I discussed in this earlier post, the Nevada Secretary of

Jeremy Bentham – Present But Not Voting

In Monday’s post, I quoted Justice Antonin Scalia and Bryan Garner quoting Jeremy Bentham.  Although Bentham studied, wrote about and criticized the law, he did not practice it.  He is most famously known for his association with the doctrine of utilitarianism.  As it turns out, his mortal remains illustrate an important corporate governance principle –

Second Circuit Rejects Brachycephalic Canine Fund’s Section 16(b) Defense

When it comes to challenging the status quo of securities regulation, Bulldog Investors lives up to its name.  In 2006, Bulldog’s principal, Phillip Goldstein, successfully challenged the Securities and Exchange Commission’s hedge fund rule.  Goldstein v. SEC, 451 F.3d 873 (D.C. Cir. 2006).  Later, Bulldog was less successful in challenging an enforcement action taken by