Commissioner Ponders Whether To Exempt Real Estate Brokers From Investment Adviser Registration

Last week, the Commissioner of Business Oversight issued an invitation for comment on whether to exempt real estate brokers from the investment adviser certification requirement under the Corporate Securities Law of 1968.  The exemption would require a real estate broker to be operating under the scope of a license issued by the Bureau of Real

1 For 3 Million Reverse Split Fraud Claim Survives Motion To Dismiss

Nancy Wojtas at Cooley LLP alerted me to an interesting ruling case decided last week by the U.S. District Court for the Eastern District of New York, Gardner v. Major Auto. Cos., 2012 U.S. Dist. LEXIS 118191 (E.D. N.Y. Aug. 21, 2012). According to a complaint, Bruce Bendell was the Chairman, Chief Executive Officer, and Chief

Department Of Corporations Extends Emergency Rule

Yesterday, the California Corporations Commissioner Jan Owen gave notice that she will file on April 4, 2012 an emergency regulation extending the effectiveness of Rule 260.204.9 of Title 10 of the California Code of Regulations.  Rule 260.204.9 currently exempts from registration investment advisers who are deemed “private advisers.”  This emergency regulatory action will become effective on April 17, 2012, the

Two Important Comment Letters Submitted

Private Fund Advisers Yesterday marked the end of the comment period with respect to the Commissioner’s proposed amendments to Rule 260.204.9.  These rule amendments are critical to advisers of private funds, including venture capital and private equity funds.  Because venture capital and other private funds are crucial financing sources for California businesses and real estate

Court Rules That Section 25400 Requires That Manipulative Conduct Occur Within California

Overstock.com, Inc. filed a lawsuit in the San Francisco Superior Court alleging that various investment firms had caused the price of its shares to decline by manipulating the securities markets.   Earlier this week, Judge John E. Munter granted summary judgment to four of the defendants.  Overstock.com, Inc. v. Morgan Stanley & Co., Inc., Superior Court Case

Department Of Corporations News For The New Year

New General Counsel For the Department of Corporations, the new year begins with a new Commissioner, Jan Owen (see Welcome to Jan Owen, California’s Newest Commissioner of Corporations!).  In December, Governor Jerry Brown also appointed John R. Hanna as General Counsel.  Mr. Hanna is an Orange County attorney.  Since 1998, he has served as a

Commissioner Proposes Successor To Rule 260.204.9

With the enactment of the National Securities Markets Improvement Act of 1996, Congress divided registration authority over investment advisers between the Securities and Exchange Commission and state securities regulators.  In general, large advisers (i.e., those with at least $25 million in assets under management) were required to register with the SEC and smaller advisers were subject to

SEC Slays Redwoods At Fearsome Pace

Yesterday, was a big day for both the regulated and the unregulated adviser industry. “The very rich are different from you and me . . . they have more money” The Securities and Exchange Commission adopted its final “family office” rules.  According to the SEC, “family offices” are established by wealthy families to manage their riches,

Commissioner Takes Emergency Action To Put More Time On The Clock For Rule 260.204.9

Yesterday, Commissioner Preston DuFauchard started the process for adding six months to the lifespan of Rule 260.204.9.  The Commissioner took this action in light of the imminent expiration of the “private adviser” exemption set forth in Section 203(b)(3) of the Investment Advisers Act of 1940.  The Dodd-Frank Act eliminates this exemption effective July 21, 2011. SEC To Adopt Final

Commissioner Announces Action To Alleviate Exempt Adviser Uncertainty

This afternoon, Commissioner Preston DuFauchard released this letter regarding the upcoming demise of the federal private adviser exemption (Section 203(b)(3) of the Investment Adviser Act of 1940).  The Commissioner’s letter is in response to concerns about the continued viability of Rule 260.204.9 which explicitly refers to Section 203(b)(3).  Essentially, the Commissioner is announcing that he will be issuing emergency