California Gets Ready For SEC Hand-off of Midsized Advisory Firms

Department of Corporations Letter To Midsized Firms If you are an SEC registered investment adviser with assets under management of between $25 million and $100 million, you should check your mailbox for this October 7 letter from Commissioner Preston Dufauchard.  The Commissioner is sending this letter to those firms that are likely to be required to transition

Should Your Company Auto-Critique?

The last ten years might be called the decade of self criticism.  In 2001, the Securities and Exchange Commission dangled a formal carrot of leniency for firms that “promptly, completely, and effectively disclosed the existence of the misconduct to the public [and] to regulators”.  The Seaboard Report. The carrot is there but what are the

DOC Finds A Reorganization Can Include A Rehabilitation

Until last year, Ambac Assurance, a Wisconsin domiciled insurer, was one of the largest monoline insurers in the world.  Originally it insured low-risk, public finance bonds.  However, in the 1990s it started to offer financial guarantee insurance on residential mortgage backed securities and collateralized debt obligations of asset-backed securities.  Not surprisingly, Ambac was a casualty of the

Be Careful What You Say When Breaking Up

CalPERS Renews State Street Custody Contract If you break up with your spouse and then announce to the world that s/he is a liar and a cheat, you can expect to raise a few eyebrows if you later announce that you are renewing your vows.  This is akin the situation now being faced by the State of California

Commissioner Announces Action To Alleviate Exempt Adviser Uncertainty

This afternoon, Commissioner Preston DuFauchard released this letter regarding the upcoming demise of the federal private adviser exemption (Section 203(b)(3) of the Investment Adviser Act of 1940).  The Commissioner’s letter is in response to concerns about the continued viability of Rule 260.204.9 which explicitly refers to Section 203(b)(3).  Essentially, the Commissioner is announcing that he will be issuing emergency

Some Things Can Be Too Late – Don’t Forget To File Your CFL Annual Report

Every person who was licensed under the California Finance Lenders Law as of December 31, 2010 must file an annual report with the California Department of Corporations.  A report is required even if the licensee has conducted no business under its licensee during 2010. The report is due on or before Tuesday March 15, 2011.  The Department of

Video: Fairness Hearings: A Faster, Cheaper Alternative To Federal Registration

Video - Fairness Hearings

Watch the video A California fairness hearing can be a faster, cheaper alternative to federal registration under the Securities Act of 1933.  Although fairness hearings can be used in a variety of situations, they are most often used by publicly traded companies using their own securities to acquire another company.  According to the Department of Corporations, the approximate

Governor Brown Spares DOC Budget

The California Constitution (Art. IV, § 12(a)) requires the Governor to submit a budget to the legislature within the first 10 days of each calendar year.  Newly elected Governor Jerry Brown did so on Monday. The Governor’s submission of a budget should not be confused with the enactment of an actual budget.  Theoretically, the Constitution requires that

“Time Cools, Time Clarifies” – The CSL’s Cooling Off Statute

The Corporate Securities Law of 1968 does not provide for a general “cooling off” period in which a purchaser of securities may cancel the transaction for any reason.  However, the Department of Corporations in 2000 sponsored legislation, SB 1837 (Figueroa), that added Corporations Code Section 25508.5 establishing a seven calendar day cooling off period with

Electronic Filing of Section 25102(f) Notices

For the last five years, the Commissioner of Corporations has required that notices of exemption filed pursuant to Corporations Code § 25102(f) be filed electronically, except in cases of demonstrable hardship.   See 10 CCR § 260.102.14(f).  Electronic filing is also required for notices of exemption required to be filed pursuant to 10 CCR § 260.103.