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CALIFORNIA CORPORATE & SECURITIES LAW

What Do You Know? Bill Proposes To Eliminate Scienter

Corporations Code Section 25401 is California’s basic securities antifraud statute: It is unlawful for any person to offer or sell a security in this state, or to buy or offer to buy a security in this state, by means of any written or oral communication that includes an untrue statement of a material fact or…

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Court Finds No “Road of Imprudence” or “Chasm of Equity” In Section 25504

Faithful readers of this blog will be familiar with the structure of the California Corporate Securities Law.  Part 5 of the CSL (Cal. Corp. Code §§ 25400 – 25404) proscribes various conduct and Part 6 (Cal. Corp. Code §§ 25500 – 25510) establishes the remedies for violations of Part 5.  See Second Circuit Declines To Apply…

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Assembly Committee Seeks To Fix Securities Fraud Statute

Readers of this blog will be familiar with my criticism of the 2013 amendment of California’s basic securities fraud statute, Corporations Code Section 25401.  See California Creates Complete Chaos By Rewriting Anti-Fraud Statute, But “We Are Against Fraud Aren’t We?”, Die Verwandlung: How The Legislature Likely Raised The Bar On Securities Fraud Actions, When California Copied Rule…

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Ninth Circuit Requires Particularity In All Elements Of Securities Fraud Pleading

Sometimes, I find it useful to take a step back and review the legal standard applicable to securities fraud claims under Section 10(b) and Rule 10b-5.  To stay in court, and securities litigation all about surviving motions to dismiss, a plaintiff must allege all of the following: A material misrepresentation or omission; Scienter; A connection…

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Court Holds Aiding And Abetting Liability Requires Material Assistance In The Violation

Corporations Code Section 25401 is the general anti-fraud provision of the Corporate Securities Law of 1968.  Section 25504.1 makes a person jointly and severally liable for a violation of Section 25401 if that person “materially assist in [the] violation of Section . . . 25401 . . . with the intent to deceive or defraud”.  Does this mean that…

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No Happy Trails For Victorville Tax Increment Bond Financing

For more than thirty years, I’ve driven by, but never stopped at, the Roy Rogers and Dale Evans Museum in Victorville, California.  The museum eventually relocated to Missouri but reportedly did not survive for long.  Despite this notable defection, Victorville has grown remarkably in the last three decades.  Unfortunately, it now finds itself accused of…

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Warning! The Government May Not Have To Tell You The Truth When It Sells Securities

Last month, the U.S. Treasury issued this press release announcing a secondary public offering of warrants to acquire the common stock of a financial services holding company.  The company originally issued the warrants to the Treasury in a private placement under the Capital Purchase Program established by the Treasury as part of its Troubled Asset Relief…

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Pipeline Pig Promise Produces No Prudhoe Pork For Plaintiff

What We’ve Got Here is A Failure to Pig  In 2006, BP Exploration (Alaska) Inc. shut down its pipelines and oil production in Prudhoe Bay, Alaska after leaks were discovered in two of its pipelines. Both leaks resulted from internal corrosion due to sediment in the pipes. A year later, BP pled guilty to one count…

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