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This May Not Be Rocket Science, But Is NASAA’s Form D Filing Fee Legal?

Earlier this week, the North American Securities Administrators Association (aka NASAA) announced the launch of its Electronic Filing Depository (EFD). The EFD allows issuers to file Form Ds in Rule 506 offerings online. A...more

12/19/2014 - Electronic Filing Filing Fees Form D Filing NASAA Rule 506 Offerings Securities

9th Circuit Upholds Issue Preclusion In Subsequent Derivative Suit

Derivative suits rarely arrive alone. When something goes awry, directors and officers can be expected to see multiple suits based on demand futility as well as wrongful demand refusal. Often, suits will be filed at...more

12/18/2014 - Claim Preclusion Corporate Officers Demand Futility Derivative Suit Directors

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...more

12/17/2014 - Dismissals Pleading Standards Pleadings PSLRA Rule 10b-5 Section 10(b) Securities Securities Exchange Act Securities Fraud

In Texas Can Some Shares Be More Equal Than Others?

Although Rome before Augustus is often described as a republic, it was in many respects ruled by the wealthy who jealously guarded their power. So it was with Rome’s comitia centuriata. In theory, this was an assembly of...more

12/16/2014 - Bylaws Proxy Season Proxy Statements Shareholder Proposals Shareholders Whole Foods

SEC Seeks To “Overrule” Fifth Circuit Whistleblower Interpretation

In Asadi v. G.E. Energy United States, L.L.C., 720 F.3d 620 (5th Cir. 2013), the Fifth Circuit Court of Appeals held that an employee who reported a suspected Foreign Corrupt Practices Act violation internally but not to the...more

12/15/2014 - Chevron Deference Dodd-Frank FCPA GE Energy SEC Whistleblowers

Commissioner Gallagher Posits SEC Would Prevail Against Harvard University

Just this week, Commissioner Daniel M. Gallagher and former Commissioner Joseph A. Grundfest issued a draft of a paper that takes on the Harvard Shareholder Rights Project. The Harvard SRP describes itself as “a clinical...more

12/12/2014 - Board of Directors Harvard University SEC Shareholders Universities

Nevada Poised To Increase Output Of Reported Decisions

In November, the voters of Nevada approved Question 1 which amended Article 6 of the Nevada Constitution to create an intermediate Court of Appeals. California’s intermediate court is styled the Court of Appeal (no “s”). ...more

12/11/2014 - Court Administration Final Rules Judges Regulation AB SEC

Does The DBO’s Draft Tribal Consultation Policy Violate the Public Records Act?

Three years ago, California Governor Edmund G. Brown Jr. issued Executive Order B-10-11. Among other things, Governor Brown ordered: that it is the policy of this Administration that every state agency and department...more

12/10/2014 - Department of Business Oversight Executive Orders Jerry Brown Native American Issues Public Records Act Tribal Governments

Should Judicial Deference To The SEC Be Strong, Weak or Non-Existent?

This post yesterday by Broc Romanek alerted me to Judge Leonard P. Stark’s recent opinion in Trinity Wall Street v. Wal-Mart Stores, Inc., 2014 U.S. Dist. LEXIS 165431 (D. Del. Nov. 26, 2014). The case involved Wal-Mart’s...more

12/9/2014 - Chevron Deference Jurisdiction No-Action Letters Proxy Statements SEC Shareholder Proposals Shareholders Wal-Mart

Was California’s Public Records Act Founded On The Aventine Hill?

I’ve always been fascinated by the fact that the ancient Romans chose to explain their origins with tales of defeat, invasion, fratricide, communal rape and assassination. The city, which eventually occupied seven hills...more

12/8/2014 - Public Records Public Records Act

Nevada Supreme Court Doubles Down On Joint Venture By Estoppel

Last March, I wrote about a decision of a panel of the Nevada Supreme Court in In re Cay Clubs, 130 Nev. Adv. 14 (2014). The defendants thereafter sought reconsideration by the Supreme Court sitting en banc. Yesterday, the...more

12/5/2014 - Corporate Liability En Banc Review Estoppel Joint Venture Partnerships

The California Implications Of Perez v. Mortgage Bankers Association

On Monday, the U.S. Supreme Court heard oral arguments in Perez v. Mortgage Bankers Ass’n et al. The case, if decided against the Department of Labor (Thomas E. Perez is the Secretary of Labor), will have a significant...more

12/4/2014 - Administrative Procedure Act DOL Mortgage Bankers Association Mortgage Loan Officer Notice and Comment Oral Argument Perez v Mortage Bankers Assoc Rulemaking Process SCOTUS Wage and Hour

Muzzling Directors Who Don’t Agree

In September, the California Public Employees’ Retirement System (CalPERS) selected Theodore “Ted” Eliopoulos as its Chief Investment Officer. This appointment was unanimously approved by the members of the Board of...more

12/3/2014 - Administrative Appointments CalPERS

Liability For Stolen Goods: A Four Thousand Year Old And Still Unsolved Problem

Suppose a businessman purchases inventory from a warehouse and then resells it. Suddenly, the owner of the goods appears and seeks compensation for her goods on the basis that the warehouse had converted the goods. The...more

12/2/2014 - Conversion Inventory Property Sales Strict Liability

DBO Proposes Reversal Of Long-Standing CFLL Interpretation

The California Finance Lenders Law generally requires that a person engaged in the business of making consumer loans and/or commercial loans obtain a license from the Department of Business Oversight. Cal. Fin. Code § 22100....more

12/1/2014 - Consumer Lenders Department of Business Oversight Exemptions Finance Lenders Lenders Licensing Rules

Judge Orders Stockholder To “Register” Correspondence With The SEC

Many boards operate with a high degree of collegiality, even when the directors disagree. Some don’t. When the board of directors of Gas Natural Inc., a publicly traded natural gas holding company, voted to remove its CEO...more

11/26/2014 - Annual Meeting Board of Directors Corporate Officers Defamation Proxy Voting Guidelines Shareholders

Buyer’s “I Have A Plan” Statement Found To Be Immaterial Puffery

A recent California Court of Appeal decision is a helpful reminder that buyers can also be targets of securities fraud suits. In Goldsholle v. Brisco, 2014 Cal. App. Unpub. LEXIS 7997 (Cal. App. 2d Dist. Nov. 6, 2014), the...more

11/25/2014 - Appeals Investors Section 25401 Securities Fraud Summary Judgment

Judge Rules Against FTB In “Doing Business” Definition

Over a year ago, I wrote about an Iowa corporation, Swart Enterprises, Inc., which operates a 60 acre farm in Kansas. Swart has no physical presence in California. It owns no real or personal property in California. However,...more

11/24/2014 - Doing Business Franchise Tax Board Limited Liability Companies Members

Do Some Companies Already Have Fee-Shifting Provisions (And Not Know It)?

A lot of folks these days are arguing and writing about fee-shifting bylaws as if they were some kind of novel and sudden irruption, like Athena bursting from Zeus’ skull. This overlooks the existence of fee-shifting...more

11/21/2014 - American Rule Bylaws Employment Contract Fee-Shifting Indemnity Agreements

Will The Courts Stop Deferring To SEC Interpretations?

In 1984, the U.S. Supreme Court announced a foundational principle of administrative law. When a court reviews an agency’s construction of a statute that it administers, the court should...more

11/20/2014 - Chevron Deference SCOTUS SEC

When California Copied Rule 10b-5 Did It Shut The State Courthouse Door To Securities Fraud Suits?

Section 27 of the Securities Exchange Act of 1934 provides: “The district courts of the United States . . . shall have exclusive jurisdiction of violations of [the Exchange Act] or the rules and regulations thereunder,...more

11/19/2014 - Corporations Code Exclusive Jurisdiction Rule 10b-5 Section 25401 Securities Exchange Act Securities Fraud

Nevada’s Business Judgment Rule: FDIC – 4; Management – 0

In recent weeks, the U.S. District Court has issued four separate rulings in cases brought by the Federal Deposit Insurance Corporation (FDIC) against former bank managers for breach of fiduciary duty. Here is a brief recap...more

11/18/2014 - Banks Breach of Duty Business Judgment Rule Directors FDIC Fraud Negligence Officers

Nevada Secretary Of State Denies Hacking Claim

Recently, Cytta Corp., a small Nevada corporation, filed this Form 8-K reporting that it had “discovered that it was the victim of an online hacking incident on October 30th, 2014 in that, unauthorized person or persons...more

11/17/2014 - Hackers Portal Secretary of State Websites

Court Of Appeal Takes A Deep Dive Into Short Selling

In a lengthy opinion issued yesterday, Justice Kathleen M. Banke explains naked short selling, describes the mechanics of executing and clearing stock trades, describes the SEC’s Regulation SHO, and recounts the SEC’s...more

11/14/2014 - Clearing Agencies Goldman Sachs Merrill Lynch Overstock.com Regulation SHO SEC Short Sales

Why Commissioner Gallagher Is Not Mistaken On Political Spending Disclosure

In this post published on October 30, I observed: According to Enver Fitch and Limor Bernstock at ISS ESG Proxy Research, shareholders associated with the Center for Political Accountability submitted 47 proposals this...more

11/13/2014 - Disclosure Requirements ISS Political Contributions SEC Securities Exchange Act Shareholders

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