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CALIFORNIA CORPORATE & SECURITIES LAW

Citizenship And The California Securities Laws

I often hear lawyers say something along the lines of “We need to find an exemption from the California Corporate Securities Law because one of the investors is a citizen of California”.  The citizenship or residency of a purchaser, however, doesn’t necessarily determine whether the CSL will apply to an offer or sale.  Qualification of an offer…

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What The SEC Doesn’t Understand About Blue Sky Laws

I recently submitted this comment letter to the Securities and Exchange Commission with respect to its proposal to modernize the exemption applicable to intrastate offerings.  The SEC somewhat misleadingly describes its proposal as ” “amendments to Rule 147 under the Securities Act of 1933”.  While that may technically be accurate, the SEC is actually jettisoning…

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What’s So Special About An 80% Doing Business Threshold?

In yesterday’s post, I dipped into the SEC’s proposed amendments to Rule 147, a safe harbor for intrastate offerings exempt from registration pursuant to Section 3(a)(11) of the Securities Act of 1933.  Among other things, the SEC is proposing to jettison the current requirement of Rule 147 that limits the availability of the rule to issuers organized…

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Judge Rules Choice Of Law Waives CSL Claim

I was quite surprised to read Judge Gregory M. Sleet’s ruling in OpenGate Capital Group LLC v. Thermo Fisher Scientific Inc., 2014 U.S. Dist. LEXIS 92256 (D. Del. July 8, 2014).  The lawsuit was brought by the purchaser of a business.  The purchase agreement included a choice of law clause specifying that the agreement would be “governed…

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Has California Lost Its Jurisdictional Anchor For Securities Fraud Actions?

Does California’s securities fraud statute apply to offers and sales of securities that are made in other states, in Europe, or on the moon?  Actually, there is no way to know.  Formerly, California Corporations Code Section 25401 began “It is unlawful for any person to offer or sell a security in this state or offer to buy…

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Section 307 – No More Sunset

Some readers may have noticed that there are currently two Section 307s in the Corporations Code.  One version of Section 307 provides in subdivision (d) that it remains in effect only until January 1, 2011.  This is commonly referred to as a “sunset provision”.   Subdivision (d) of the other Section 307 provides that it…

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Yes, There is no “S” in California

Regulation S has been available for two decades.  The rule establishes nonexclusive safe harbors for offers, sales and resales of securities outside the United States.   Over the years, many foreign and domestic issuers have relied upon the rule to conduct offshore offerings without complying with the registration and prospectus delivery requirements of the Securities Act of 1933.  As servicable…

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