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CALIFORNIA CORPORATE & SECURITIES LAW

Hacking EDGAR And Insider Trading

SEC Chairman Jay Clayton launched a sea of news stories last week when he included the following five sentence in a statement on cybersecurity: Notwithstanding our efforts to protect our systems and manage cybersecurity risk, in certain cases cyber threat actors have managed to access or misuse our systems.  In August 2017, the Commission learned…

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Professor Robert J. Jackson Jr. Nominated To Become A Member Of The Securities And Exchange Commission

As Broc Romanek noted yesterday, President Donald Trump has nominated Columbia Law School Professor Robert J. Jackson, Jr. to become a member of the Securities and Exchange Commission.  Over the years, Professor Jackson’s name has made several appearances in this blog, including: Why Commissioner Gallagher Is Not Mistaken On Political Spending Disclosure Political Spending Disclosures –…

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Even If Enacted, The CHOICE Act May Not Repeal The SEC’s Pay Ratio Rule

While prognosticators continue to place odds on whether the Financial CHOICE Act of 2017, H.R. 10, will be enacted, many commentators are claiming that it will “repeal” the Securities and Exchange Commission’s pay ratio rule.  Even if H.R. 10 is enacted, I’m not so sure that it would “repeal” the pay ratio rule. It is certainly true…

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Does A Political Yard Sign Really Violate The Investment Advisers Act?

“Congress shall make no law . . . abridging the freedom of speech . . . .” Doug Cornelius recently published this post reporting that the SEC staff is taking the position that the pay-to-play rule, Rule 206(4)-5, applies to political yard signs.  [After publishing this post, Doug Cornelius published this clarification.]  The SEC adopted the…

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Financial Difficulties – A Bizarrely Vague Standard For Disclosure

Earlier this year, the Securities and Exchange Commission published for comment proposed amendments to the Municipal Securities Disclosure Rule (Rule 15c2-12).  The existing rule is complicated and I will not attempt to explain it here.   For purposes of this discussion, suffice it to say that the SEC is proposing to add an event notice for the occurrence of…

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SEC Staff Reports On “Real Estate Funds”, But What Exactly Are They?

Yesterday, the SEC staff announced that it had published a suite of new data and analyses of private fund statistics and trends.  These data include information with respect to “real estate funds”.  But what exactly is a “real estate fund”?  The answer is more than just a little arcane. The SEC gathers the data from Form PFs.  You are required…

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The SEC’s Flawed Changes To Exchange Act Forms

Title I of the Jumpstart Our Business Startups (aka JOBS) Act amended the Securities Act and the Exchange Act to provide some regulatory relief to issuers that qualify as an “emerging growth company”.  Recently, the Securities and Exchange Commission adopted various changes to its forms and rules to conform to Title I.  The SEC elected not to comply with the notice and…

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Exactly What Part Of “To The Commission” Is Ambiguous?

The Dodd-Frank Act gave us many things, including Section 21F of the Securities Exchange Act of 1934.  Section 21F, prohibits employers from retaliating against a “whistleblower”.  15 U.S.C. § 78u-6(h)(1)(A).  We need not guess about the definition of “whistleblower” because Congress conveniently provided the following definition: . . . any individual who provides, or 2 or more…

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Will Congress Deep Six The SEC’s Resource Extraction Rule?

In December of last year, I wrote about how the Securities and Exchange Commission’s Resource Extraction Rule might meet an untimely end.  See There’s Still Time For Congress To Void The SEC’s Resource Extraction Rule (Dec. 14, 2016).  The rule, Rule 13q-1 and an amendment to Form SD, had an extraordinarily difficult birth: Congress had ordered…

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How Independent Is The SEC And How Independent Should It Be?

Can the President say “You’re Fired!” to an SEC Commissioner? In a recent post, John Jenkins emphasized the commonly held understanding that the Securities and Exchange Commission is an “independent agency”.  The independence of the SEC, however, is not beyond debate.  In Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477, 546 (2010), Justice Stephen G.…

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