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CALIFORNIA CORPORATE & SECURITIES LAW

Court Of Appeal Voids Jury Trial Waiver Notwithstanding New York Choice of Law

A New York state of mind, but California dreaming A sophisticated lender and borrower negotiate a loan agreement in New York, the lender disburses the loan proceeds in New York, and both parties agree that New York law governs.  This choice-of-law is memorialized in bold face type and capital letters in the loan agreement.  In…

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10th Circuit Holds SEC ALJs Are Holding Office Unconstitutionally

In March 2015, I posed the following question: But if you were hailed before an unconstitutional tribunal with the ostensible authority to fine you and bar you from working, would you want a “real” court to step in and consider the constitutionality of the proceedings? Since raising that question, several respondents in administrative proceedings brought by…

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All Power To The People: Initiatives And Referenda In California

A year ago, I addressed the effective date of California legislative bills in this post.  In California, the people can also exercise legislative power through two different mechanisms – the initiative and the referendum.  In fact, the California Constitution proclaims: All political power is inherent in the people.  Government is instituted for their protection, security,…

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New LLC Act May Curtail Authority Of Managers Of Pre-Existing LLCs

California’s Revised Uniform Limited Liability Company Act (RULLCA) took effect on the first of this year.  The RULLCA repealed California’s first LLC law – the Beverly-Killea Limited Liability Company Act.  The forced subjugation of pre-existing LLCs to the RULLCA is subject to constitutional question.  See Legislature Shuts The Barn Door After The Horse Has Bolted And Then…

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Why Incorporation May Be Unconstitutional

Section 25018 of the California Corporations Code provides a definition of several of the better known federal securities laws: “Securities Act of 1933,” “Securities Exchange Act of 1934,” “Public Utility Holding Company Act of 1935,” “Investment Advisers Act of 1940,” and “Investment Company Act of 1940” mean the federal statutes of those names as amended…

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U.S. Supreme Court Decides Fate of Legislative Platypus

This morning, the U.S. Supreme Court issued its opinion concerning the constitutionality of the Public Company Accounting Oversight Board (PCAOB). The Court held that the dual for-cause limitations on removal of PCAOB members contravene the U.S. Constitution’s principle of separation of powers.  (See my article in which I concluded “This violates Article II of the…

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