A recent post discussed whether amending a shareholders agreement is subject to qualification under the California Corporate Securities Law of 1968. For the purpose of that discussion, it is important to recognize that not...more
The federal securities laws predate by decades the advent of limited liability companies and the statutory definitions of a "security" under those laws has not been updated to address membership interests in LLCs. California...more
Section 3(a)(5) of the Securities Exchange Act of 1934 defines the term “dealer” to mean “any person engaged in the business of buying and selling securities . . . for such person’s own account through a broker or otherwise,”...more
Yesterday, the California Department of Financial Protection & Innovation warned investors that an "entity calling itself “Hartman Cain & Associates,” which represents itself as a law firm based in California, and operates...more
Is the issuance of shares upon exercise of a stock option distinguishable from the issuance of the option? The answer under California's Corporate Securities Law of 1968 may surprise some. Corporations Code Section 25017...more
The many California laws are intended to protect borrowers. The California Financing Law, for example, provides that it is to be liberally construed to, among other things, "protect borrowers against unfair practices by some...more
The California Corporate Securities Law of 1968 applies a tripartite classification scheme to securities transactions. Corporations Code Section 25110 requires qualification of issuer transactions; Section 25120 requires...more
A week ago, the United States Securities and Exchange Commission charged Kim Kardashian with touting on social media a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the...more
In June, I reported that Assemblymember Grayson had gutted and amended AB 2269 to establish a "Digital Financial Assets Law" to be administered by the Department of Financial Protection & Innovation. The bill was amended...more
A recent decision by the Nevada Supreme Court highlights the definition of "sale" in Section 25017 of the California Corporations Code. The suit arose from the plaintiff's claim that certain facts were not disclosed to him...more
California's Corporate Securities Law of 1968 makes offers it unlawful for any person to offer or sell a security in any nonissuer transaction unless it is qualified or exempt (or not subject to) qualification. Cal. Corp....more
The California Corporate Securities Law of 1968 declares it unlawful for any person to offer or sell in this state any security in an issuer, nonissuer, or reorganization transaction unless the sale has been qualified or is...more
Key Points - - In May, the Securities and Exchange Commission (SEC) adopted amended rules relating to acquired company financial statements. This advisory discusses the amended requirements and updated tests for...more
California's limited offering exemption (Cal. Corp. Code § 25102(f)) requires an issuer to file a notice of transaction with the Department of Business Oversight with 15 calendar days after the first first sale of the...more
Section 25235 of the California Corporations Code declares that is unlawful for an investment adviser to engage in a number of specified activities, including employing "any device, scheme, or artifice to defraud any client...more
I trust that by now most quotidien readers of this blog should be familiar with Corporations Code Section 25402 which declares insider trading to be unlawful. Although the statute has been on the books since the enactment of...more
Anyone who has studied securities regulation since 1946 should be familiar with the U.S. Supreme Court’s definition of a “security” as enunciated by Justice Frank Murphy in S.E.C. v. Howey Co., 328 U.S. 293 (1946). That test...more
California’s Corporate Securities Law of 1968 defines and provides for the comprehensive regulation of most, but not all, investment advisers. Some investment advisers are subject to an entirely different law found in the...more
The State of California doesn’t like persons who commit securities fraud. Persons who mislead others by means of a written or oral misstatement of a material fact or omission of a material fact can be held liable for...more
Almost a year ago, the Commissioner of Corporations (now the Commissioner of Business Oversight) proposed to amend the custody rule, 10 CCR Section 260.237, for investment advisers under the Corporate Securities Law of 1968. ...more
Both Section 2(1) of the Securities Act of 1933 and Section 25019 of the Corporate Securities Law of 1968 provide extensional definitions of the term “security”. That is, they each list everything within the term being...more