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Judge Rules Internal Affairs Doctrine Governs California Insider Trading Statute

As I have mentioned on numerous occasions, California has its own insider trading statute – California Corporations Code Section 25402.  The statute is included in the California Corporate Securities Law of 1968.  In general, the jurisdiction of organization of an issuer is irrelevant to the application of the CSL.  Thus, in most instances, the operative issue will…

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Officers And The Internal Affairs Doctrine

My guess is that most attorneys would say that the duty of an officer to the corporation are governed by the law of the state of incorporation under the “internal affairs doctrine”.  As explained by the U.S. Supreme Court, the “internal affairs doctrine” is a conflict of laws principle that “recognizes that only one State should…

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Director May Pursue Malicious Prosecution Claims Against Plaintiffs’ Attorneys

Lawsuits against directors can seem very one-sided with the plaintiffs starting at bat and never having to take to the field to play defense.  This may be changing as a result of a very significant decision issued last Friday by the Second District Court of Appeal in Cole v. Patricia A. Meyer & Associates, APC…

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Choice Of Law And Derivative Suits

The California Corporations Code carefully defines the the terms “corporation” (Section 162), “domestic corporation” (Section 167), “foreign corporation” (Section 171); and “foreign association” (Section 170).  For example, when the legislature provided in Section 1500 that “[e]ach corporation shall keep adequate and correct books and records . . . “, the legislature imposed a mandatory obligation…

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Court Rules Choice Of Law Provision Takes Precedence Over Internal Affairs Doctrine

To say that the Delaware courts and bar are very fond of the internal affairs doctrine is about as controversial as wearing white before Labor Day.  If you have any doubts about the sacred status of the doctrine in Delaware, I refer you to the Delaware Supreme Court’s decision in Vantagepoint Venture Partners 1996 v. Examen,…

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