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Oxfam America Argues SEC Has “Unlawfully Withheld And Unreasonably Delayed” Resource Extraction Rule

I’ve often wished that my legal acumen could be judged by the same standard as professional baseball players. If that were the case, I could be wrong nearly 60% of the time and yet be considered one of the greatest legal...more

3/6/2015 - Conflict Mineral Rules Disclosure Requirements Form 10-K Oxfam Oxfam America SEC

Bill Would Authorize Payments For Commercial Loan Referrals

California State Senator Marty Block has introduced a bill, SB 197, that would authorize a licensed finance lender to compensate an unlicensed person or company in connection with the referral of one or more prospective...more

3/5/2015 - Client Referrals Commercial Loans Finance Lenders Licensing Rules Proposed Legislation

Are LLC Interests Securities in California?

Does California consider membership interests in a limited liability company to be securities? There are two correct answers to this question – yes and no. As I discussed a few years back, the California Corporate Securities...more

3/4/2015 - Corporations Code Limited Liability Companies Membership Interest Securities

Does Former Officer Have An Obligation To Turn Over Whistleblower Award?

Monday, the Securities and Exchange Commission announced “a whistleblower award payout between $475,000 and $575,000 to a former company officer who reported original, high-quality information about a securities fraud that...more

3/3/2015 - Corporate Officers Enforcement Actions Popular Sanctions SEC Whistleblower Awards Whistleblowers

Broad Coalition Delivers Blunt Rebuke To SEC Chairman

Last month, I wrote that the SEC’s about face in responding to the no-action letter request of Whole Foods Market, Inc. “clearly wasn’t the SEC’s finest hour.” Several days later, a coalition of some 17 different...more

3/2/2015 - Mary Jo White No-Action Letters Proxy Season SEC Whole Foods

Is Anything Fishy With The SEC’s Whistleblower Inquiries?

Yesterday, Rachel Louise Ensign of The Wall Street Journal wrote that the SEC recently sent letters “to a number of companies asking for years of nondisclosure agreements, employment contracts and other documents”.  According...more

2/27/2015 - Dodd-Frank Employment Contract Enforcement SEC Subpoenas

Finders Bill Was Lost, But Now Is Found

In the last legislative biennium, the Corporations Committee of the Business Law Section of the California State Bar sponsored a bill, AB 713 (Wagner) to clarify the status of finders under the California Corporate Securities...more

2/26/2015 - Broker-Dealer Brokers Corporations Code Proposed Legislation

The “Long Arm” Of Section 2115 May Be Shorter Than Some Believe

Recently, I came across a prospectus that included a description of California Corporations Code Section 2115 under the caption “Description of Capital Stock”. The description began...more

2/25/2015 - Foreign Corporations Prospectus Stocks

To Conjoin Or Not To Conjoin – California Sometimes Gets It Wrong

This is as an easy mistake to make. I say so because I’ve made it more than once. The name of the landmark Depression era legislation regulating our national securities markets is the Securities Exchange Act of 1934; the...more

2/23/2015 - SEC Securities Exchange Act

Indicate By Check Mark If This Instruction Makes No Sense: v

I wonder if I’m alone in being completely mystified by the following instruction that appears on the cover page of the SEC’s Form 10-K: Indicate by check mark if the registrant is not required to file reports pursuant...more

2/20/2015 - Form 10-K Regulation S-K SEC

SEC’s Rule 14a-8 Volte-Face Is Pointlessly Outré But It Does Have Real World Ramifications

Readers may recall that last December Whole Foods Market, Inc. had secured the SEC staff’s concurrence in excluding a shareholder access proposal submitted by Jim McRitchie. Then, SEC Chair Mary Jo White directed the staff...more

2/19/2015 - No-Action Letters Proxy Access Rule Proxy Statements Rule 14a-8 SEC Shareholder Proposals Shareholders Whole Foods

Does The SEC Have Hedging Backwards?

Last week, the Securities and Exchange Commission announced that it is proposing new rules requiring “disclosure about whether directors, officers and other employees are permitted to hedge or offset any decrease in the...more

2/18/2015 - Dodd-Frank Hedging Proposed Regulation Public Disclosure SEC

Revealed! The Numbers The Attorney General Didn’t Want You To See

Since 2003, the California Attorney General has been required to maintain “a whistleblower hotline to receive calls from persons who have information regarding possible violations of state or federal statutes, rules, or...more

2/17/2015 - Jerry Brown Kamala Harris Public Disclosure Whistleblower Hotlines Whistleblowers

Did The SEC Violate The Administrative Procedure Act?

Yesterday, Broc Romanek wrote about the joint dissent issued by Commissioners Daniel M. Gallagher and Michael S. Piwowar with respect to the Commission’s recent adoption of Regulation SBSR which requires regulatory reporting...more

2/13/2015 - Administrative Procedure Act Reporting Requirements SEC Security-Based Swaps Swaps

CalPERS Global Governance Program Targets Income Inequality

The Investment Committee of CalPERS’ Board of Administration will meet next Tuesday. The committee, which is comprised of all 13 members of the Board of Administration, is responsible for, among other things, investment...more

2/12/2015

Director Claims That She Ne’er Consented, Court Finds Consent

Last April, I warned that October 1, 2014 would be a critical day for directors of Nevada corporations. See link below.  Now, we have a case giving proof to my warning.  Advanced Vision Solutions, Inc. v. Lehman, 2015 U.S....more

2/11/2015 - Directors Employer Liability Issues Hiring & Firing Personal Jurisdiction

Unregistered Foreign LLCs – Are They In Violation?

The California Revised Uniform Limited Liability Company Act (RULLCA), which took effect on January 1 of last year, is fraught with drafting mysteries.  Why, for example, did the legislature deem it necessary to change the...more

2/10/2015 - Derivative Suit Foreign Corporations LLC Pleading Standards RULLCA Secretary of State

Chairman, Chairwoman, or Chair?

To someone who is not familiar with the English language, many words must seem bizarre. One such word, is “chairman”. Does this refer to a chair made into a man or a man made from a chair? What should be made of a law that...more

2/9/2015 - Gender Neutrality

Nevada Supreme Court Finds No Jurisdiction In Suit By Nevada Client Against Texas Law Firm

In an opinion issued yesterday, the Nevada Supreme Court considered whether a Nevada client had made the requisite prima facie showing of personal jurisdiction over its erstwhile Texas-based law firm.  Fulbright & Jaworski...more

2/6/2015 - Breach of Duty Fiduciary Duty Jurisdiction Law Firm Partners Personal Jurisdiction

Court Refuses To Break Board Deadlock By Appointing A Provisional Director

Section 308 of the California Corporations Code provides for the appointment of a provisional director when a corporation has an even number of directors who are equally divided and cannot agree as to the management of the...more

2/5/2015 - Board of Directors Corporate Governance Corporations Code Directors Power of Appointment

You Say Collectable, I Say Collectible

Recently, I circulated a draft agreement that included a representation that a party’s receivables were collectible. The other side returned a draft that modified the representation and changed the spelling to “collectable”....more

2/4/2015

Court Of Chancery Rejects Delaware Choice Of Law

The public policies of California and Delaware both espouse freedom. Ironically, the freedoms that they espouse are antithetical to each other. California embraces the freedom of people to pursue any lawful and employment...more

2/3/2015 - Choice-of-Law Limited Liability Companies Non-Compete Agreements Public Policy

Applying Today’s Statute To Yesterday’s Offer And Sale

In September 2013, Governor Jerry Brown signed SB 538 (Hill) into law. This bill fundamentally rewrote a key anti-fraud provision of the Corporate Securities Law of 1968 – Corporations Code Section 25401. At the time, I...more

2/2/2015 - Corporations Code Federal Rules of Civil Procedure Forum Selection Clause Jerry Brown New Legislation Securities Securities Fraud

These Data Show Nevada Rising And California Sinking

A recent paper by Matthew D. Cain, an economic fellow at the Securities and Exchange Commission, Stephen B. McKeon, an Assistant Finance Professor at the University of Oregon, and Steven Davidoff Solomon, a Professor of Law...more

1/30/2015 - Business Formation Jurisdiction

Court Of Appeal Decides Against Arbitration Bylaw Amendment

Much has been written of late about the enforceability of exclusive forum bylaws. What happens when the forum isn’t a court, but an arbitration? Does it make any difference if the arbitration bylaw is adopted after a...more

1/29/2015 - Appeals Arbitration Bylaws Exclusive Forum Proposed Amendments

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