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CALIFORNIA CORPORATE & SECURITIES LAW

Even In Nevada, “Get It In Writing” May Not Be Far From The Mark

A recent ruling by U.S. District Court Magistrate George Foley, Jr. serves as a reminder the “get it in writing” tends to be good advice.  The case involves a casino’s attempt to enforce a $3 million gaming debt incurred by one of its patrons.  This patron executed a credit agreement but the casino allowed him…

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10th Circuit Holds SEC ALJs Are Holding Office Unconstitutionally

In March 2015, I posed the following question: But if you were hailed before an unconstitutional tribunal with the ostensible authority to fine you and bar you from working, would you want a “real” court to step in and consider the constitutionality of the proceedings? Since raising that question, several respondents in administrative proceedings brought by…

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This Evidentiary Privilege May Stop At The Border

Unlike other states, California’s rules of evidence are found in statutes, not court rules.  This is not simply a legal curiosity.  The statutory basis of California’s “rules” of evidence have real world implications. The California Evidence Code begins with the underlying premise that disclosure is required. Thus, no person has a privilege unless otherwise provided…

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Why Commissioner Gallagher Is Not Mistaken On Political Spending Disclosure

In this post published on October 30, I observed: According to Enver Fitch and Limor Bernstock at ISS ESG Proxy Research, shareholders associated with the Center for Political Accountability submitted 47 proposals this year.  The 32 that actually went to a vote only garnered an average of 28.5% of the vote.  That means that on…

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Die Verwandlung: How The Legislature Likely Raised The Bar On Securities Fraud Actions

With the availability of a private cause of action under SEC Rule 10b-5, is there any reason to include a cause of action under California Corporations Code Sections 25401 and 25501?  Until the most recent legislative session, there were significant differences between the federal rule and the California’s securities laws. California’s scheme has not required…

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California Creates Complete Chaos By Rewriting Anti-Fraud Statute, But “We Are Against Fraud Aren’t We?”

In my very limited encounters with the late Harold Marsh Jr., I recall that he didn’t readily embrace proposed “fixes” to the Corporations Code.  As I too get older, I’ve come to appreciate his perspective.  For example, Governor Brown just signed SB 538 (Hill), a bill that fundamentally changes California’s securities fraud statute. Among other…

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Why Corporations Receive Shareholder Proposals

Recently, I spoke at an “essentials” program presented by the Society of Corporate Secretaries and Governance Professionals.  I was asked to speak on “what is corporate governance”?  In my view, practitioners are so caught up in the details of corporate governance that they can easily lose sight of why people are arguing about corporate governance. Like many,…

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SEC Argues That Sales Of Hotel Rooms Are Sales of A Security

In June, I wrote this post about U.S. District Court Judge Dana Sabraw’s opinion in Salameh v. Tarsadia Hotels, 2011 U.S. Dist. LEXIS 30375.  The case involved the question of whether ownership interests in individual units of the Hard Rock Hotel San Diego constitute securities under either the investment contract test enunciated by the U.S. Supreme Court in…

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