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CALIFORNIA CORPORATE & SECURITIES LAW

Real Estate Fund Advisers And Penumbra Registration

Last August, the Securities and Exchange Commission adopted amendments to Form ADV, the form used by investment advisers to register with the SEC and with the states.  Included in these amendments were changes to allow multiple private fund adviser entities operating a single advisory business to file one Form ADV.  These changes formalized prior staff guidance…

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The Investment Company Act And Roy M. Cohn

Last week, UFCW Local 1500 Pension Fund filed a class action and derivative lawsuit against Yahoo! Inc., its board of directors and some of its current and former officers.  (N.D. Cal. Case No. 3:16-cv-00478-RS).  According to the complaint, Yahoo describes itself as a global Internet new media company that offers a branded network of media, commerce,…

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California’s Bizarre Voting Record Disclosure Requirements

Section 711 of the California Corporations Code is so poorly drafted that it almost defies explanation.  According to the legislature’s findings, the ostensible purpose of the statute is to facilitate the informed and active involvement of beneficial owners of shares “in holding legal owners and through them, management accountable in their exercise of corporate power”.  The statute purports…

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Defining “Qualified Client” – Uff Da!

Corporations Code Section 25234 generally prohibits an investment adviser registered in California to be compensated on the basis of a share of capital gains.  This prohibition is analogous to the prohibition found in Section 205(a)(1) of the Investment Advisers Act of 1940 (IAA).  Congress included this prohibition because it was believed that performance fees might induce…

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Hedge Fund Advertising – What’s The Wall Street Journal Talking About?

Last week, the Wall Street Journal published an article stating: “The JOBS Act, signed by President Obama on April 5, lifted a decades-old restriction on how hedge funds can go after new investors, clearing the way for managers to speak more publicly about their strategies and performance and even to advertise.” Later, a WSJ blog asserted:…

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Rule 260.204.9 – What is to be Done (Part II)?

Last August, I wrote about the impact of the Dodd-Frank Act on Rule 260.204.9 in this post.  Last Thursday, I attended a meeting called by the Department of Corporations to solicit input from persons with an interest in the rule.  Technically, the meeting was held in accordance with Government Code § 11346.45.  That statute requires…

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Governor Signs Capital Access Company Bill

Yesterday, Governor Arnold Schwarzenegger signed into law SB 1155 (Dutton).  This bill amends California’s unique Capital Access Company Law.  That law was enacted to take advantage of the exemption set forth in Section 6(a)(5)(A) of the Investment Company Act of 1940.  Although the California Capital Access Company Law, Cal. Corp. Code § 28000 et seq., has been on…

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A Rara Avis Indeed, The Capital Access Company

More than a decade ago, the California legislature added the Capital Access Company Law to the Corporations Code, Stats. 1998, c. 668 (S.B. 2189).  The intent of the law was to take advantage of an exemption to the Investment Company Act of 1940 that Congress added as part of the National Securities Markets Improvement Act…

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