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CALIFORNIA CORPORATE & SECURITIES LAW

Is There A State Role For Binary Option Regulation?

The North American State Securities Administrators Association (NASAA) recently warned investors about the risks of investing in binary options.  While NASAA asserts that many binary trading platforms are “unregulated or are completely illegal”, I found it surprising that it didn’t cite any state securities or other laws that might regulate, much less outlaw, binary options…

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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…

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Bill Aims To Add Bite To Federal Conflict Minerals Disclosure Requirement

Section 1502 of the Dodd-Frank Act added a new Section 13(p) to the Securities Exchange Act of 1934.  Section 13(p) requires the SEC to promulgate disclosure and reporting regulations regarding the use of conflict minerals from the Democratic Republic of the Congo and adjoining countries. In compliance with this Congressional mandate, the SEC issued these…

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Does the Dodd-Frank Act Revive the CA Bucket Shop Law?

California has had its current Bucket Shop Law on the books since 1949.  The Bucket Shop Law, among other things, voids all contracts for the purchase or sale of shares without any intention on the part of one party to deliver, and the other party to receive, the shares, and contemplating the payment of the…

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Dodd-Frank Act Preempts CSL Qualification of Certain Securities

Most securities lawyers are familiar with federal preemption of state qualification requirements pursuant to Section 18 of the Securities Act of 1933 (“Securities Act”).  See, e.g., my post regarding preemption and Rule 506 offerings.  I expect that fewer lawyers are familiar with preemption pursuant to Section 28(a) of the Securities Exchange Act of 1934 (“Exchange Act”).  In…

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How to Avoid a Filing Fee

When forming a subsidiary corporation, many lawyers rely on the exemption contained in Corporations Code Section 25102(f) or upon federal preemption via Corporations Code Section 25102.1(d).  Both of these sections require the filing of a notice with the Commissioner of Corporations (although the failure to file a notice of exemption under Section 25102(f) does not affect the availability…

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