More Maladroit Drafting From The SEC

Last December, the Securities and Exchange Commission proposed a new exemptive rule under the Investment Company Act of 1940.  The proposed rule would allow mutual funds, exchange-traded funds (“ETFs”), closed-end funds, and companies that have elected to be treated as business development companies (“BDCs”) under the ICA to enter into derivatives transactions and financial commitment transactions notwithstanding

Court Holds Corporations Have No Constitutional Privacy Right, But . . .

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Article I, Section 1 of the California Constitution provides that “all people” have an inalienable right of privacy.  Does this right extent to corporations?  Seemingly it would if corporations are considered “people”.  Some might cite the U.S. Supreme Court’s holding in Citizens United v. FEC, 558 U.S. 310, 394 (U.S. 2010) and argue that the

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

An American Icon Amends Stock Plan To Make It Section 25102(o) Eligible – Why?

Section 102 the National Securities Markets Improvement Act (which amended Section 18 of the Securities Act of 1933) deems securities listed (or authorized for listing) on the NYSE, the American Stock Exchange or the National Market System of NASDAQ to be “covered securities”.   A security is also a “covered security” under the NSMIA if it is listed

Initiative Seeks To Dehumanize Corporations In California

Are corporations “persons”?  The California Corporations Code answers this question quite directly in Section 18 which defines “person” as including corporations and natural persons.  The Corporate Securities Law of 1968 goes even further – defining “person” to mean an individual, a corporation, a partnership, a limited liability company, a joint venture, an association, a joint stock company,

Standardized Options – Who’s Your Daddy?

A securities call option is a derivative security representing the right, but not the obligation, to acquire an underlying security.  When the person selling an option is also the issuer of the underlying security, then there is no question that that person is also the issuer of the option.  See Section 2(a)(4) of the Securities Act of 1933

New U.S. Exchange – “It’s Better Than A Magic Lantern Show”

What’s the third largest securities exchange operator in the United States and where is it located?  The answers may surprise you.  The exchange operator is called BATS and it is based outside of Kansas City.  BATS is derived from an initialization of Better Alternative Trading System. What Next! What Next? BATS was formed less than a decade ago as an