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CALIFORNIA CORPORATE & SECURITIES LAW

California Finders Bill Trapped In The Weeds As Legislative Deadline Looms

The question of whether finders’ fees can be paid in securities transactions has bedeviled issuers for decades.  The Corporations Committee of the Business Law Section of the California has tried to address this recurring problem by sponsoring AB 713 (Wagner).  In a nutshell, the bill would attempt to bring some certainty to the status of…

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Some Questions About Delaware’s New Law Allowing Parties To Extend The Statute Of Limitations

Delaware recently amended its law to allow parties to a written contract involving at least $100,000 to provide that any action based on that contract may be brought within a period specified in that contract provided that the action is brought prior to the expiration of 20 years from the accrual of the cause of action.  10…

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Insurer Claims Attorney-Client Privilege Of Third Parties Prohibits Disclosure To Its Own Attorneys

At first, this case seems somewhat pedestrian – a lawyer sues her erstwhile law firm for employment discrimination.  But then things get complicated.  It turns out that the lawyer was employed by a law firm that was employed by an insurer to represent its insureds.  When the lawyer served a request for production of documents, the insurer…

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Has California Lost Its Jurisdictional Anchor For Securities Fraud Actions?

Does California’s securities fraud statute apply to offers and sales of securities that are made in other states, in Europe, or on the moon?  Actually, there is no way to know.  Formerly, California Corporations Code Section 25401 began “It is unlawful for any person to offer or sell a security in this state or offer to buy…

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Supreme Court Blocks Citizens United Advisory Proposition From Ballot

I’ve previously reported on SB 1272 which was rushed through the legislature and allowed to become “law” without Governor Brown’s signature.   The bill, authored by Senator Ted Lieu, calls for an advisory vote on whether the United States Congress and California Legislature should approve an amendment to the U.S. Constitution overturning the United States…

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Former Executive Has No Right To Possess A-C Privileged Documents

Suppose that a corporation terminates its president and chief executive officer who then sues for breach of his employment contract.  Does the former executive officer have a right to access and use materials subject to the attorney-client privilege that were created during his tenure with the corporation?  If so, what would be the theory? In…

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Did Abraham Lincoln Engage In The Unauthorized Practice Of Law?

I recently learned that I’m supposedly related to a certain Joshua Short, late of Sangamon County, Illinois.  I don’t know much about Mr. Short other than he was a farmer who couldn’t write his own name and wasn’t feeling very well in the summer of 1836.  Infirmity has a way of turning one’s thoughts to…

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This Court’s Ruling Puts The Opinion In Auditor’s Internal Control Opinion

A brief ruling issued this week by U.S. District Court Judge James C. Mahan makes it clear that an auditor isn’t always liable even when a subsequent auditor uncovers fraud.  In Oaktree Capital Mgmt., L.P. v. KPMG, 2014 U.S. Dist. LEXIS 106538 (D. Nev. 2014), the plaintiffs had purchased notes issued by a company that…

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Really? Requiring Someone To Use Information “Fairly And Lawfully” Can Be Illegal?

Companies have lots of very good reasons for adopting codes of conduct.  These reasons include: Ensuring compliance with applicable exchange listing rules (e.g., NYSE Rule 303A.10 and NASDAQ Rule 5610); Minimizing the risk of securities law violations (e.g., Regulation FD and Rule 10b-5); Protecting company assets (trade secrets as well as reputational assets); Complying with contractual obligations requiring confidentiality;…

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Stockholder Proposal Seeks Ratification Of All Decisions And Actions

For the last six years, Amerco as included a rather unique stockholder proposal in its proxy statement.  It’s there again this year.  Basically, it asks the stockholders to ratify and affirm all decisions and actions by Amerco’s directors and executive officers during the preceding fiscal year.  This ratification proposal was originally presented at the 2009 annual…

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