“Security” Definitions In CSL And ’33 Act – Similar But Not The Same
Both the California legislature and the U.S. Congress have enacted extensional definitions of “security” – that is Section 25019 of the Corporate Securities Law of 1968 and Section 2(a)(1) of the Securities Act each provides a list of what constitutes a security. These lists, however, are not the same. Here’s what’s on the California list that isn’t on the federal list: Membership Read more...
Finding Ambiguity – The Future Of Mandatory Rule Making Under The Dodd-Frank Act
When Congress says that an agency “shall” adopt a rule, is there any room for discretion on the part of the agency? That was the question for U.S. District Court Judge Robert L. Wilkins in International Swaps & Derivatives Ass’n v. U.S. Commodity Futures Trading Comm’n, Civil Action No. 11-cv-2146 (RLW) (D. D.C. Sept. 28, 2012). The case involved the Read more...
Supreme Court Fails To Bite At Bulldog And Oxfam America Sues The SEC
Supreme Court says “no” to Bulldog In March, I wrote that the Bulldog group of funds had asked the United States Supreme Court to determine the constitutionality of Massachusetts’ ban general solicitations in connection with the offer and sale of unregistered securities. Despite representation by Harvard Law School Professor Laurence H. Tribe and an amicus brief from the Cato Institute, Read more...
Waiting For The SEC . . .
Do deadlines really matter? The answer is - ”it depends”. At the Civil War military prison at Camp Sumter near Andersonville, Georgia, the “dead line” clearly mattered – as reflected in the Secretary of War’s report of the post bellum trial of the camp’s commander, Heinrich “Henry” Wirz: And he, the said Wirz, still wickedly pursuing his evil purpose, did establish and cause to be designated within Read more...
San Francisco And Portland (Me) Do What The SEC Refused To Do
Section 951 of the Dodd-Frank Act requires companies that are subject to the SEC’s proxy rules to include in their proxy statements “a separate resolution subject to shareholder vote” to determine whether a shareholder vote on executive compensation will occur every 1, 2, or 3 years. When the SEC was considering amendments to its rules to implement this requirement, I argued that Read more...
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 to state registration under the Read more...
Without Knowing The Reasons, Issuers Can’t Take Account Of Say-on-Pay Votes
The recently completed proxy season has yielded a virgin crop of shareholder “say-on-pay” votes, as required by Section 951 of the Dodd-Frank Act. Although not required by Congress, the Securities and Exchange Commission amended Item 402(b)(1) of Regulation S-K to require an issuer to address in its Compensation Discussion and Analysis whether and, if so, how its compensation policies and decisions have taken into Read more...
Commissioner Takes Emergency Action To Put More Time On The Clock For Rule 260.204.9
Yesterday, Commissioner Preston DuFauchard started the process for adding six months to the lifespan of Rule 260.204.9. The Commissioner took this action in light of the imminent expiration of the “private adviser” exemption set forth in Section 203(b)(3) of the Investment Advisers Act of 1940. The Dodd-Frank Act eliminates this exemption effective July 21, 2011. SEC To Adopt Final Invest Adviser Act Rules The Securities Read more...
Dinner Is Served: Will The Volcker Rule Spur Interest In California’s Capital Access Company Law?
Congress issues an invitation When Congress enacted the National Securities Markets Improvement Act of 1996 (aka the “NSMIA”), it added a new exemption to the Investment Company Act of 1940. Under Section 6(a)(5), a company will be exempt if, among other things, It is not engaged in the business of issuing redeemable securities; and Its operations are subject to regulation by Read more...
Supreme Court Resolves Janus Controversy But The Gates of War Are Not Entirely Closed
Yesterday, the U.S. Supreme Court issued its decision in Janus Capital Group, Inc. v. First Derivative Traders. In a 5-4 decision, the Court found that to be liable under Rule 10b-5, a person must “make” the material misstatement. According to Justice Thomas writing for the majority, a person is a “maker” of a statement when that person “is the person or entity Read more...
