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CALIFORNIA CORPORATE & SECURITIES LAW

Can The Legislature Hire Its Own Lawyer?

In early January, California Senate President pro Tempore Kevin de León and Assembly Speaker Anthony Rendon jointly announced that the California Legislature had hired outside legal counsel to advise on potential legal challenges with the incoming administration of Donald Trump.  I found this interesting as I could not recall a prior circumstance in which the legislature had ever…

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Why You Should Have Read Last Week’s Posts On California’s D&O Loan Ban

I spent the better part of last week writing about California Corporations Code Section 315.  The statute general prohibits a corporation (Section 162) from making a loan of money or property to, or guaranteeing the obligation of, an officer or director without specified shareholder approval.  What happens if a prohibited loan is made? The good…

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How The Defend Trade Secrets Act Of 2016 Opens The Door To Disclosure Of Trade Secrets

François-Marie Arouet, better known as Voltaire, once famously wrote “Ce corps qui s’appelait et qui s’appelle encore le saint empire romain n’était en aucune manière ni saint, ni romain, ni empire (This body, which was, and is, titled the Holy Roman Empire was in no way holy, Roman, or an empire)”.  Essai Sur Les Moeurs, Ch. LXX.  A similar…

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Court Holds SEC Filing Is Not Public Disclosure

California has patterned its false claim law, Cal. Gov’t Code §§ 12650 et seq., after the federal False Claims Act.  As the names of these laws suggest, they are intended to protect the public fisc from false or fraudulent claims.  The CFCA empowers private parties to pursue actions for, and in the name of, the…

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California AG Asks Retailers And Manufacturers To Report On Supply Chains Act Compliance

The California Attorney General’s office recently sent letters to retailers and manufacturers asking them to demonstrate compliance with the California Transparency in Supply Chains Act or why they are not subject to the act.  I first wrote about the act in early 2011.  It requires retail sellers and manufactures doing business in California to disclose…

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What, If Anything, Is The Attorney General’s Office Hiding?

In January, I decided to update an earlier post regarding the number of calls made to the California Attorney General’s hotline mandated by Labor Code Section 1102.7.  A few years earlier, I had published these data for the years from 2004 to 2010.  Much to my amazement, the Attorney General’s office declared the more recent…

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Revealed! The Numbers The Attorney General Didn’t Want You To See

Since 2003, the California Attorney General has been required to maintain “a whistleblower hotline to receive calls from persons who have information regarding possible violations of state or federal statutes, rules, or regulations, or violations of fiduciary responsibility by a corporation or limited liability company to its shareholders, investors, or employees.”  Cal. Lab. Code § 1102.7(a).…

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Unregistered Foreign LLCs – Are They In Violation?

The California Revised Uniform Limited Liability Company Act (RULLCA), which took effect on January 1 of last year, is fraught with drafting mysteries.  Why, for example, did the legislature deem it necessary to change the default rules with respect to whether a California LLC is member-managed or manager-managed?  See Why A Form LLC-1 May Be Only…

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The Politics Of Securities Enforcement

Historically, the Governor appointed California’s Commissioners of Corporations.  Cal. Corp. Code § 25600.  Today, the Governor still appoints the head of the new Department of Business Oversight.  Having served as a Commissioner, I believe that it is preferable to have securities enforcement decisions made by an appointed rather than an elected official.  An appointed Commissioner doesn’t need to raise money for his or her election or…

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CalPERS Agrees That It Will Not Enforce Conflict Of Interest Policy

As discussed in this post, I had petitioned the Office of Administrative Law for a determination that the Statement of Investment Policy for External Investment Resource Conflict of Interest adopted by the California Public Employees’ Retirement System constituted an illegal “underground” regulation. The OAL accepted my petition and established a schedule for CalPERS and interested…

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