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CALIFORNIA CORPORATE & SECURITIES LAW

Second DCA Takes Issue With Fourth DCA Over Privity

Privity is one those requirements that isn’t intrinsically interesting and yet it is extremely important.  Over the last year, I’ve written several posts discussing the privity requirement (or lack thereof) under the Corporate Securities Law of 1968, including these posts: Court Rejects Control Requirement For Director Liability (discussing Hellum v. Breyer, 194 Cal.App.4th 1300 (2011)); Is…

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Three Moms Alleged To Have “Socked It To” PTA Members

Several news stories appeared this week about three Southern California mothers who allegedly used their involvement in an elementary school PTA to solicit investors in a Ponzi scheme.  According to this press release issued by the Los Angeles District Attorney, more than 30 people were defrauded out of $1 million.   Move over Mrs. Taylor, widow Jones and…

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NY District Court Finds That Same Plaintiff In ARS Case Has No California Securities Law Claims

In this Friday the 13th post, I wrote about The Anschutz Corporation’s (TAC) success in having California law apply to its negligent representation claims against the defendant New York rating agencies.  Thus, it may come as a surprise to learn that a different federal district court judge has rejected TAC’s California securities law claims. TAC…

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Court Applies California Common Law To New York Rating Agencies

In another auction rate securities (ARS) case, The Anschutz Corporation (TAC) brought suit against several rating agencies alleging negligent misrepresentation.  The Anschutz Corp. v. Merrill Lynch & Co., Fed. Sec. L. Rep. (CCH) P96,258 (N.D. Cal. March 27, 2011).  District Judge Susan Illston’s opinion is interesting because she tackles the question of whether California or New…

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In A Securities Fraud Action, The Date Of Filing May Determine Whether You Win Or Lose (And I’m Not Referring To The Statute Of Limitations)

Yesterday, I discussed one-half of the battle in Zalkind v. Ceradyne, Inc. Today, I address the securities law issues raised by Ceradyne’s cross-complaint. To recap, the Zalkinds (Stanley, Elizabeth and a limited partnership that they owned) sold assets to Ceradyne for stock and cash.  The Zalkinds’ suit against Ceradyne for failure to timely register the stock…

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No Rescission Without Privity

California Corporations Code Section 25401 declares unlawful the sale or purchase of a security by means of a written or oral communication that includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were…

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