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CALIFORNIA CORPORATE & SECURITIES LAW

Silver Hills Doesn’t Mute Howey

Anyone who has studied securities regulation since 1946 should be familiar with the U.S. Supreme Court’s definition of a “security” as enunciated by Justice Frank Murphy in S.E.C. v. Howey Co., 328 U.S. 293 (1946).  That test asks “whether the scheme involves an investment of money in a common enterprise with profits to come solely from the…

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Commodities And The CSL

A recent unpublished opinion by Justice William W. Bedsworth set me to cogitating on the status of commodities under the Corporate Securities Law of 1968.  In Kelly v. Monex Co., 2013 Cal. App. Unpub. LEXIS 5903 (Aug. 21, 2013), the plaintiff had lost substantial amounts in trading gold and silver through the defendant.  She sued and the…

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Are There Silver Hills In Other States?

In Silver Hills May Tarnish Crowdfunding, I wrote about Justice Roger J. Traynor’s alternative definition of “security” under the predecessor to the Corporate Securities Law of 1968.  Silver Hills Country Club v. Sobieski, 55 Cal. 2d 811 (1961)  Justice Traynor’s definition may cause problems for crowdfunders who are relying on the fact that their arrangements don’t meet the…

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Silver Hills May Tarnish Crowdfunding

Both Section 2(1) of the Securities Act of 1933 and Section 25019 of the Corporate Securities Law of 1968 provide extensional definitions of the term “security”. That is, they each list everything within the term being defined.  See Why the Word “Includes” Conflates the Separation of Powers“.  In each statute, the twelfth item listed is…

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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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Section 25501.5 – “A Riddle, Wrapped In A Mystery, Inside An Enigma”

Last December, I wrote this post about Corporations Code § 25501.5 that asked “What do it mean?”.  In general, the statute authorizes an action for rescission (or damages, if the security is no longer owned) by any person “who purchases a security from or sells a security to a broker-dealer that is required to be licensed and has not”.  However, the statute makes little…

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