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CALIFORNIA CORPORATE & SECURITIES LAW

Subcommitee Recommends SEC Rules Imposing Fiduciary And Disclosure Duties On Brokers

Recently, the Securities and Exchange Commission posted two recommendations by the Investor as Purchaser Subcommittee of the Investor Advisory Committee.  In general, the Subcommittee recommended: The SEC should conduct a rulemaking to impose a fiduciary duty on broker-dealers when they provide personalized investment advice to retail investors; and As part of its rulemaking, the SEC should adopt…

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California Court Of Appeal Affirms Dismissal Of Say-On-Pay Suit

Yesterday, a panel of the California Court of Appeal added to the growing list of opinions rejecting suits triggered by failed say-on-pay votes.  Some may be surprised that this case, which involves a Delaware corporation, was in the California courts of all, but the Ninth Circuit has held that the Dodd-Frank Act’s say-on-pay mandate did not by itself confer…

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“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…

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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,…

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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…

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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…

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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…

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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…

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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…

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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…

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