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CALIFORNIA CORPORATE & SECURITIES LAW

The NSMIA Didn’t Lay A Preemptive Finger On These Transactions

Last week, I was in Washington D.C. where I served as the moderator of a panel discussion on current securities law issues for small business.  As part of my presentation, I discussed the following list of securities transactions that have not been preempted by the National Securities Markets Improvement Act of 1996 (aka the NSMIA): Offers…

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A Program Guide To The Facebook Fairness Hearing

As discussed in this earlier post, Facebook, Inc. has requested a fairness hearing before the California Department of Corporations.  Technically, the hearing is being held pursuant to Corporations Code Section 25142 in connection with Facebook’s application for a permit authorizing the issuance of securities to effect its proposed acquisition of Instagram, Inc.   Since a permit may…

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Facebook “Likes” California’s Fairness Hearing Process!

In this video from January 2011, I spoke about California’s fairness hearing procedure.  California is one of only a handful of states that offer the opportunity to take advantage of the Section 3(a)(10) exemption from registration under the Securities Act of 1933.  This exemption is most typically used by public issuers who wish to acquire a…

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Mirabile Dictu! “Common Stock Does not Constitute an Investment in ‘Stock'”

Anyone who has picked up a prospectus or a private placement memorandum has undoubtedly seen, if not read, various legends and other warnings.  Recently, I came across the following legend in an offering document: COMMON STOCK DOES NOT CONSTITUTE AN INVESTMENT IN “STOCK” IN THE COMMON SENSE OF THE TERM.  PURCHASERS SHOULD NOT PURCHASE COMMON…

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DOC Finds A Reorganization Can Include A Rehabilitation

Until last year, Ambac Assurance, a Wisconsin domiciled insurer, was one of the largest monoline insurers in the world.  Originally it insured low-risk, public finance bonds.  However, in the 1990s it started to offer financial guarantee insurance on residential mortgage backed securities and collateralized debt obligations of asset-backed securities.  Not surprisingly, Ambac was a casualty of the…

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