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CALIFORNIA CORPORATE & SECURITIES LAW

Should Tweener Corporations Include This Provision In Their Equity Compensation Plans?

I have previously commented on the phenomenon of what I call the “tweener” corporation.  See Will The Rise Of Tweener Corporations Increase Focus On California’s Annual Report Statute?  These are corporations that are not quite private and not quite publicly traded.  One of the advantages of not being subject to the reporting requirements of the Securities…

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Is This The SEC Or The Lotto?

Last week, the Securities and Exchange Commission trumpeted that whistleblower awards have now exceeded $100 million, or a million Benjamins! “Chance, the loss or gain of a moment” The SEC’s total payout is impressive, but the number of payees is extremely small.  According to the SEC, awards were paid to only 33 persons. Moreover, 77.6% of the…

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California Legislature Mulls Anti-Short Selling Bill

In April, I wrote about a bill, SB 726 (Hueso), that would have added a new section to the Corporate Securities Law banning false statements to government officials for the purpose of manipulating the price of a company’s security by triggering an investigation.  See “Bill Aims To Put The Kibosh On Alleged Hedge Fund Stock…

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Does The SEC’s New Form 10-K Rule Create A New Disclosure Standard?

Yesterday, the Securities and Exchange Commission announced that it has adopted an interim final rule that allows Form 10-K filers to provide a summary of business and financial information contained in their annual reports.  The SEC adopted the rule pursuant to Section 72001 of the Fixing America’s Surface Transportation (FAST) Act.  The rule adds a new Item 16 to…

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Did The SEC Staff Bypass The APA In Issuing New And Revised Non-GAAP Financial Measure C&DIs?

Earlier this week, the staff of the SEC’s Division of Corporation Finance issued several new, and rewrote several existing, Compliance and Disclosure Interpretations (“C&DIs”) relating to Non-GAAP Financial Measures.  Recently, the SEC has been signaling that it intends to crack down on company disclosures of Non-GAAP Financial Measures.  While some are likely to welcome additional guidance…

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Is Forced Speech In Responding To Staff Comment Letters Inaccurate Speech?

In 2014, the Securities and Exchange Commission announced that all comment letters would request that the issuer include the so-called “Tandy Letter”.  Thus, all staff comment letters include a request for a written statement in haec verba: The company is responsible for the adequacy and accuracy of the disclosure in the filing; Staff comments or…

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SEC Alleges LLC Names Were “Deceptively Similar”, But What Would The California SOS Do?

Yesterday, the SEC announced that it had filed a complaint against a securities professional alleging that he had defrauded “two institutions he solicited to invest in a shell company he controlled whose name was deceptively similar to that of a legitimate private equity fund.”  (The SEC likes to say that it “charges” defendants, but it…

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Court Enjoins SEC Administrative Proceeding

Last March, I posed the following question:  But if you were hailed before an unconstitutional tribunal with the ostensible authority to fine you and bar you from working, would you want a “real” court to step in and consider the constitutionality of the proceedings? At the time, I was disappointed by U.S. District Court Judge Rudolph…

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CalPERS To Consider Support For Corporate Political Spending Disclosure Mandate

Next week, the California Public Employees Retirement System will consider a staff recommendation “to update the legislative and policy guidelines to include support for Securities and Exchange Commission (SEC) rulemaking on disclosure of the use of corporate resources for charitable and political activities.”  Under the California Constitution (Art. XVI, § 17(b)), the members of CalPERS’…

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Facing Legal Challenges, SEC Proposes To Reform Administrative Proceedings

As has been widely reported elsewhere, the Securities and Exchange Commission has been facing a spate of challenges to its administrative court.  It should come as no surprise then that the SEC recently announced a number of proposals to the rules of practice in that forum.  I have already submitted a comment letter on the…

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