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CALIFORNIA CORPORATE & SECURITIES LAW

Exactly What Part Of “To The Commission” Is Ambiguous?

The Dodd-Frank Act gave us many things, including Section 21F of the Securities Exchange Act of 1934.  Section 21F, prohibits employers from retaliating against a “whistleblower”.  15 U.S.C. § 78u-6(h)(1)(A).  We need not guess about the definition of “whistleblower” because Congress conveniently provided the following definition: . . . any individual who provides, or 2 or more…

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Does Whistleblower Protection Extend To Disclosures To Your Mom Or The Press?

California and federal law establish ample protections for whistleblowers.  These protections can be found in numerous laws, including the Sarbanes-Oxley Act, the Dodd-Frank Act, and Section 1102.5 of the California Labor Code.  Whistleblowing typically involves the disclosure of someone else’s confidential information and that disclosure may constitute the breach of a confidentiality agreement.  Thus, a…

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Five Propositions Concerning The SEC Whistleblower Program

Congress, not the Securities and Exchange Commission, established the whistleblower program six years ago as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  As the program has awarded over $100 million to date, it merits a critical analysis and review. Accordingly, I propose the following five propositions for consideration and debate: The whistleblower program…

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Why State Registration Of Security-Based Swaps Is Non-Existent

The regulation of “swaps” lies at the intersection of the commodities and securities regulation.  In the parlance of commodity regulation, a “swap” is a contract or transaction that provides for a payment dependent on an event or contingency “associated with” a financial, economic or commercial consequence.  7 U.S.C. § 1a(47).  A “security-based swap” is a “swap”…

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Is The SEC On Schedule To Violate Another Law?

Last December, President Obama signed into law the Fixing America’s Surface Transportation Act (aka the “FAST Act“).  Buried in the FAST Act were several provisions intended to lighten the load of Securities and Exchange Commission compliance.  Section 72001 requires the SEC to issue regulations to permit issuers to submit a summary page on Form 10–K (17…

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Court Rules Directors Are Agents

Last August, I wrote that Magistrate Judge Joseph C. Spero would soon be deciding whether a director might be an agent of the corporation.  See Court Poised To Decide Whether Directors Are Agents.  The case, Wadler v. Bio-Rad Labs., Inc., 2015 U.S. Dist. LEXIS 144468 (N.D. Cal. Oct. 23, 2015), involves the plaintiff’s complaint that he…

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CalPERS And Pay Equity

The Securities and Exchange Commission has given notice of its intent to adopt final pay ratio disclosure rules at its meeting next week.  In applauding the SEC’s proposed rules, the California Public Employees’ Retirement System observed: Finally, we believe the ratio will be a number which prompts commentary and discussion, providing an important data point…

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Why The WSJ Is Wrong About SEC Rulemaking On Claw backs

As noted by Broc Romanek, The Wall Street Journal yesterday announced: The Securities and Exchange Commission will soon propose long-awaited rules forcing companies to claw back, or revoke, some of their top officials’ incentive pay if they have to restate the financial results that led to it, according to people familiar with the agency’s internal…

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Commissioner Ponders Whether To Exempt Real Estate Brokers From Investment Adviser Registration

Last week, the Commissioner of Business Oversight issued an invitation for comment on whether to exempt real estate brokers from the investment adviser certification requirement under the Corporate Securities Law of 1968.  The exemption would require a real estate broker to be operating under the scope of a license issued by the Bureau of Real…

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SEC Shamelessly Targets Late Filers

Yesterday, the Securities and Exchange Commission announced “charges” against 28 officers, directors, or major shareholders for failing to report timely ownership and transactions as required by Section 16(a) and Section 13 of the Securities and Exchange Act of 1934.  These individuals were ordered pay thousands of dollars in fines and to cease and desist from future…

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