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CALIFORNIA CORPORATE & SECURITIES LAW

Magistrate Judge Rules SEC’s Attorney-Conduct Rules Preempt State Law

Last December, Chief Magistrate Judge Joseph C. Spero ruled that the SEC’s attorney-conduct rules preempt California’s statutory and professional rules requiring attorneys to maintain inviolate the confidences.  Wadler v. Bio-Rad Laboratories, Inc., 2016 U.S. Dist. LEXIS 176166  (N.D. Cal. Dec. 20, 2016).  This is a topic that I and other members of the Corporations Committee of…

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A New Regulatory Paradigm For The SEC?

Many are speculating on the future of federal securities regulation as a result of the election of Donald J. Trump and the concomitant Republican control of both houses of Congress. Broc Romanek, for example, asks whether Michael S. Piwowar will become the SEC’s next Chairman.  Broc notes that Commissioner Piwowar is an economist, not a lawyer. …

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SEC Condemns Breach Of Client Confidences While Offering Possible Bounties For Breaches

Yesterday, the Securities and Exchange Commission announced that it had “charged a California-based attorney and his wife with insider trading on confidential information obtained from a corporate client.”  According to the SEC’s complaint, the attorney had tipped material non-public information concerning a client, Spectrum Pharmaceuticals, Inc., to his spouse.  According to the SEC’s complaint, the attorney…

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SEC Acknowledges Ethical Obligations May Preclude Voluntary Reporting Out By Attorneys

In 2003, the Securities and Exchange Commission adopted rules that purportedly immunized attorneys who, subject to specific conditions, reveal confidential information to the SEC.  17 C.F.R. § 205.3(d)(2).  Technically, the rule permits, but does not require such disclosure without the consent of the “issuer” (who may or may not be the attorney’s client). The SEC’s adoption…

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Does An SEC Attorney Commit An Ethical Violation By Encouraging Whistleblowing Lawyers?

The Harvard Law School Forum on Corporate Governance and Financial Regulation included a comprehensive post by Lawrence A. West which tackles the question of whether attorneys can be award-seeking whistleblowers.  I want to approach the topic from the other direction.  May an SEC attorney actively solicit disclosure of client confidences from a member of the California State Bar? California…

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How Much Would You Charge For A Rule 144 Opinion?

Yesterday, the Securities and Exchange Commission announced that it had filed a civil complaint against a California lawyer for “churning out baseless legal opinion letters for penny stocks through his website without researching and evaluating the individual stock offerings.”  According to the SEC, the lawyer advertised a $285 rate for each letter and a “volume…

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They May Be At The Gate, But Lawyers Are Not Gatekeepers

In the sixth century BCE, the king of Clusium (a city in Tuscany) attacked Rome.  A one-eyed junior officer, Publius Horatius Cocles, took up the task of defending a key bridge, the Pons Sublicius, when his more senior officers were casting about in confusion.  Centuries later, the English historian, politician and poet Thomas Babington MaCaulay immortalized Horatius’ valiant actions in…

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