Website Heading

CALIFORNIA CORPORATE & SECURITIES LAW

Preemption Of Secondary Trading Is Fast Becoming More Obscure

Secondary trading of securities in California must be qualified unless exempt or not subject to qualification due to federal preemption.  Cal. Corp. Code § 25130.  Similarly, the offer and sale of securities are subject to registration under the Securities Act of 1933 unless exempt.  Sections 4(a)(1) and 4(a)(3) of the Securities Act are the exemptions…

Share on:

Congress’ Strange New Secondary Trading Exemption

Yesterday’s post introduced new Section 4(a)(7) of the Securities Act of 1933, as added by the Fixing America’s Surface Transportation Act or the “FAST Act”.  Boiled down to the essentials, this is a secondary trading exemption.  This is made clear by Section 4(d)(7) which is captioned “Issuers Disqualified”: The transaction is not for the sale of a…

Share on:

What 19 Eminent Law Professors Would Have You Believe

UCLA Law School Professor Stephen Bainbridge yesterday highlighted an amicus curiae brief filed recently by 19 law professors in Friedrichs v. California Teachers Ass’n.  That case, which is now pending before the U.S. Supreme Court, is concerned with the constitutionality of agency-shop arrangements.  The law professors argue: Because of how capital is saved and invested in corporations, most…

Share on:

NASAA Mistakes The Principal

I have frequently commented on the fact that many so-called “investor protections” have the unintended consequence of increasing the risk of investor losses.  One example is limitations on resales.  An illiquid security presents greater risk than a liquid security.  Investors understand this and will apply an illiquidity discount to the price of a security.  In this…

Share on:

SEC Marks The Ides By Bringing Actions Involving Secondary Market For Private Company Shares

Nearly two years ago, I began writing about some of the issues related to secondary trading in private company shares.  Yesterday (Prid. Id. Mart.), the Securities and Exchange Commission announced that it had taken action against several firms and individuals related to activities involving secondary trading of private company shares.  In this Litigation Release, the…

Share on: