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Court Finds No “Road of Imprudence” or “Chasm of Equity” In Section 25504

Faithful readers of this blog will be familiar with the structure of the California Corporate Securities Law.  Part 5 of the CSL (Cal. Corp. Code §§ 25400 – 25404) proscribes various conduct and Part 6 (Cal. Corp. Code §§ 25500 – 25510) establishes the remedies for violations of Part 5.  See Second Circuit Declines To Apply…

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Federal Court Finds There Can Be No Control Person Liability Without Primary Violator Privity

Yesterday, I covered Judge Lewis A. Kaplan’s holding in In re Lehman Bros. Securities & Erisa Litigation, 2012 U.S. Dist. LEXIS 148177 (Oct. 15, 2012) that there is no liability under Corporations Code Section 25400 when the plaintiff and defendant dealt in different securities.  Judge Kaplan also considered the parameters of liability under Corporations Code Section 25504.  That statute imposes liability on,…

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Second DCA Takes Issue With Fourth DCA Over Privity

Privity is one those requirements that isn’t intrinsically interesting and yet it is extremely important.  Over the last year, I’ve written several posts discussing the privity requirement (or lack thereof) under the Corporate Securities Law of 1968, including these posts: Court Rejects Control Requirement For Director Liability (discussing Hellum v. Breyer, 194 Cal.App.4th 1300 (2011)); Is…

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Court Rejects Control Requirement For Director Liability

Outside directors and their counsel should take note of yesterday’s decision by the First District Court of Appeal in Hellum v. Breyer.  The case analyzes what a plaintiff must plead in attempting to assert liability against directors of an issuer that has allegedly violated the registration requirements of the Securities Act of 1933 and the…

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