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CALIFORNIA CORPORATE & SECURITIES LAW

A Criminal Waste Of Space Foments Securities Law Problem

California Court of Appeal Justice William W. Bedsworth writes the popular syndicated column “A Criminal Waste of Space”.  In this month’s column, Justice Bedsworth expounds on the highly improbable case of a man who purchased a Pick-9 ticket at the track and somehow managed to pick all nine winners.  Szadolci v. Hollywood Park Operating Company,…

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Your Condo May Be Secure, But Not A Security

Two years ago, I wrote 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 S.E.C. v.…

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Mirabile Dictu! “Common Stock Does not Constitute an Investment in ‘Stock'”

Anyone who has picked up a prospectus or a private placement memorandum has undoubtedly seen, if not read, various legends and other warnings.  Recently, I came across the following legend in an offering document: COMMON STOCK DOES NOT CONSTITUTE AN INVESTMENT IN “STOCK” IN THE COMMON SENSE OF THE TERM.  PURCHASERS SHOULD NOT PURCHASE COMMON…

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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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