Can Officers Contract For The Business Judgment Rule?

Yesterday, I wrote about a recent memorandum opinion by U.S. District Court Judge Dale S. Fischer that led to a jury verdict awarding nearly $169 million in damages against three former corporate officers.  Among other things, Judge Fischer ruled that the business judgment rule is not available to corporate officers under California law. Nearly four years ago, the

Is FDIC v. Van Dellen California’s Smith v. Van Gorkom?

Last Friday, the jury in FDIC v. Van Dellen (C.D. Cal. Case No. CV 10-4915 DSF (SHx)) returned a verdict totalling nearly $169 million against three former officers of the home builder division of IndyMac Bank, F.S.B.  The Office of Thrift Supervision closed the bank in 2008.  As the receiver for the bank, the Federal Deposit Insurance Corporation filed

Move Over Hester Prynne: If Your Company Is Delinquent, You May Also Be Wearing A Scarlet Letter

In 2006, then Assembly Member Jerome Horton authored AB 1418 to require the Board of Equalization and the Franchise Tax Board to make publicly available lists of the 250 largest tax delinquencies in excess of $100,000.  In California, the BOE collects sales and use taxes and the FTB collects personal and corporate taxes. Last year, the

DOC Warns Financial Services Licensees And Can A Theory Be A Tautology?

Last April, the Consumer Financial Protection Bureau issued this Bulletin cautioning supervised banks and certain non-depository financial services companies that they must have “an effective process for managing the risks of service provider relationships”.  Like many regulatory requirements, the Bulletin has given birth to both a new industry and unintended consequences.  The new industry is third-party risk management.  This is a

DOC Gives Notice of New Filing Requirements For Real Estate Issuers

New Filing Requirements Yesterday, the Commissioner of Corporation issued Release 121-C announcing new filings required by Corporations Code Section 25102.2 which takes effect on January 1, 2013.  As discussed in Bill Targets Real Estate Industry And Borrowers, these requirements were intended to address abuses in securities offerings by hard money lenders.  Unfortunately, the new requirements will be

A Forum Selection Clause Issue That You May Not Have Heard About Until Now

In a forthcoming paper, Professor Joseph A. Grundfest at Stanford Law School examined the incidence of forum selection provisions by chartering and headquarters jurisdictions.  It may come as a surprise to very few that California ranked first: “The largest percentage of publicly traded entities with intra-corporate forum selection provisions, 31.6% of the sample (42 of 133), are headquartered

Can CalPERS Be Sued In Federal Court Or Perhaps Even New York State Court?

The California Public Employees’ Retirement System began lending securities in the early 1980s.  Since the early 1990s, CalPERS has used the Master Securities Loan Agreement (MSLA) originally developed by the former Bond Market Association (fka Public Securities Association and nka Securities Industry and Financial Markets Association).  I’m told by CalPERS that it currently uses the 2000 version

Court Holds That Same Attorney May Advocate Before The ALJ and Agency Head

The Department of Corporations, like many state and federal agencies, does not observe a strict separation of powers.  Indeed, the Department performs quasi-legislative functions in the form of rule making, prosecutorial (executive) functions in the form of investigation and advocacy and quasi-adjudicative functions in the form of making decisions.  The combination of prosecutorial and adjudicative functions within a single agency is

Californians Like To Whistle While They Work

California Ranked No. 1! The staff at the Securities and Exchange Commission recently released the 2012 Annual Report on the Dodd-Frank Whistleblower Program.  It turns out that California leads the other states in terms of the number of tips received.   According to the report, California accounted for 17.4% of all tips received.  The next highest ranking state,

NV SOS Introduces Sleek New B2G Solution

Even if you don’t make business filings in Nevada, I encourage you to check out the Nevada Secretary of State’s business portal – SilverFlume.  This is a truly innovative site with a high degree of cross-agency integration.  SilverFlume has many features that I have not seen on any other Secretary of State’s website (if your state offers anything