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CALIFORNIA CORPORATE & SECURITIES LAW

The DBO As Religious Regulator

In December last, the Department of Business Oversight published the 2016 Commissioner’s Report on the Offer or Sale of Securities by Permit under Corporations Code Section 25113.  This report, which is required by California Corporations Code Section 25113(d), provides data on the permits issued by the Commissioner under the Corporate Securities Law of 1968.  Qualification by…

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NASAA Releases 2015 Enforcement Report

State securities regulators serve an important local enforcement function.  In fact, state securities regulation precedes federal regulation by more than two decades.  The North American Securities Administrators Association is an association of state, provincial and territorial securities regulators from the 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico, Canada, and Mexico.…

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Is There A State Role For Binary Option Regulation?

The North American State Securities Administrators Association (NASAA) recently warned investors about the risks of investing in binary options.  While NASAA asserts that many binary trading platforms are “unregulated or are completely illegal”, I found it surprising that it didn’t cite any state securities or other laws that might regulate, much less outlaw, binary options…

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NASAA Mistakes The Principal

I have frequently commented on the fact that many so-called “investor protections” have the unintended consequence of increasing the risk of investor losses.  One example is limitations on resales.  An illiquid security presents greater risk than a liquid security.  Investors understand this and will apply an illiquidity discount to the price of a security.  In this…

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This May Not Be Rocket Science, But Is NASAA’s Form D Filing Fee Legal?

Earlier this week, the North American Securities Administrators Association (aka NASAA) announced the launch of its Electronic Filing Depository (EFD).  The EFD allows issuers to file Form Ds in Rule 506 offerings online.  A number of states (but not California) issued press releases announcing their participation in NASAA’s EFD.  New Jersey, for example, issued this…

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Securities Regulator “Surprised and Offended” By SEC’s Regulation A+ Proposal

Section 401 of the JOBS Act directs the Securities and Exchange Commission to adopt rules exempting offerings of up to $50 million of securities annually from the registration requirements of the Securities Act of 1933, as amended.  Last December the SEC proposed rule amendments to Regulation A to implement this mandate.  This is sometimes referred…

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Does The SEC’s Regulation A Proposal Defy Congress’ Clear Intent?

This week’s announcement by the Securities and Exchange Commission that it is proposing amendments to update and expand Regulation A has attracted quite a bit of attention.  David Lynn writing in Broc’s Blog took special note of the proposed preemption of state blue sky laws.  As expected, additional preemption did not sit well with the…

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NASAA Supports Regulatory Relief For M&A Brokers

Last June, Congressman Bill Huizenga introduced H.R. 2274 which would amend the Securities Exchange Act of 1934 to provide for a notice-filing registration procedure for brokers performing services in connection with the transfer of ownership of smaller privately held companies.  In most cases, registration would be effective upon filing.  Given NASAA’s generally jaundiced view of…

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NASAA And The DOC Warn Investors Of The “Madding Crowd’s Ignoble Strife”

Crowdfunding Caveats Issued To say that the North America Securities Administrators Association was not pleased when Congress enacted the JOBS Act is like saying that Captain George Pollard and his crew had an unpleasant cruise on the Essex.  NASAA was especially wounded by Congress’ decision to create a crowdfunding exemption under the Securities Act of 1933 and to preempt state qualification…

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NASAA Slams The JOBS Act, But Have The States Really Been Handcuffed?

NASAA isn’t in the business of firing off rockets but it did launch a missile yesterday targeted directly at the JOBS Act.  In this press release, NASAA’s president, Jack E. Herstein, is quoted as saying: The JOBS bill the President signed today is based on faulty premises and will seriously hurt all investors by either eliminating or reducing transparency…

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