Keith Paul Bishop

Keith Paul Bishop

Allen Matkins Leck Gamble Mallory & Natsis LLP

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Latest Publications


The Most Important Principles of Delaware Corporate Law Can’t Be Found In the DGCL

I have often observed that you can read every section of the Delaware General Corporation Law and learn almost nothing about Delaware corporate law.  Here are three of the most fundamental principles of Delaware corporate law...more

11/30/2015 - Business Judgment Rule Delaware General Corporation Law Derivative Suit Pleading Standards Standard of Review

How A Train Wreck Changed The Constitution

In the early morning of October 3, 1970 on rural road just outside San Jose, 61-year old Engineer Anthony Gassell was at the controls of his Southern Pacific locomotive as it headed northwest. At the same time, 24-year old...more

11/25/2015 - CA Supreme Court Public Utilities Commission Railways Trains

To Whom Does “Related Parties” Refer In A.S. No. 18?

In June of last year, the Public Company Accounting Oversight Board adopted Auditing Standard No. 18 which “establishes requirements regarding the auditor’s evaluation of a company’s identification of, accounting for, and...more

11/24/2015 - Audit Policies Disclosure Requirements FASB PCAOB Related Parties

ISS Ignores Contrary Studies In Adopting Overboarding Policy Change

ISS released its 2016 Benchmark Policy Recommendations last Friday. I had previously criticized ISS for its proposal to change its recommendation on withholding votes with respect to directors who sit on too many boards...more

11/23/2015 - Benchmarks Investment Adviser ISS Overboarding Proxy Voting Guidelines

Enjoining The Correct Spelling

In yesterday’s post, I wrote about Judge Leigh Martin May had issued a ruling enjoining a SEC administrative proceeding. Presumably, Judge May has or will issue an injunction. This leads me to question why the verb is...more

11/20/2015 - Legal Writing

Court Enjoins SEC Administrative Proceeding

Last March, I posed the following question:   But if you were hailed before an unconstitutional tribunal with the ostensible authority to fine you and bar you from working, would you want a “real” court to step in and...more

11/19/2015 - Administrative Hearings Appointments Clause SEC

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...more

11/18/2015 - Advisory Opinions Binary Options Bucket Shop CFTC NASAA SEC

If It Doesn’t Sell Buckets, Is It Truly A Bucket Shop?

An often overlooked corner of the California Corporations Code is the Bucket Shop Law, Cal. Corp. Code § 29000 et seq. The law quite literally criminalizes the keeping of a bucket shop: "Any person who . . . is the keeper of...more

11/17/2015 - Bucket Shop Commodities Corporations Code Criminal Liability Securities Trustees

Society Warns ISS That Overboarding Policy Change Will Hurt Women And Minority Directors

Recently, I criticized ISS’ proposed changes to its policy on “overboarding”. Therefore, I was pleased to see that I wasn’t a lone voice crying in the wilderness. The Society of Corporate Secretaries and Governance...more

11/16/2015 - Board of Directors Diversity Glass Lewis ISS Overboarding

The California Political Contribution Case That 19 Law Professors Missed

Earlier this week, I wrote about an amicus curiae brief submitted by 19 law school professors Friedrichs v. Cal. Teachers Ass’n, a case now pending before the United States Supreme Court. In particular, I questioned whether...more

11/13/2015 - Board of Directors Business Judgment Rule Campaign Contributions Friedrichs v CA Teachers Association SCOTUS

CalPERS To Consider Support For Corporate Political Spending Disclosure Mandate

Next week, the California Public Employees Retirement System will consider a staff recommendation “to update the legislative and policy guidelines to include support for Securities and Exchange Commission (SEC) rulemaking on...more

11/12/2015 - CalPERS Campaign Contributions Corporate Governance Rulemaking Process SEC

Did 19 Law Professors Get The Business Judgment Rule Wrong?

In yesterday’s post, I wrote about the amicus curiae brief filed by 19 law school professors in Friedrichs v. California Teachers Ass’n, a case now pending before the United States Supreme Court.  Being a California corporate...more

11/11/2015 - Business Judgment Rule Homeowners' Association Non-Profits PACs Ultra Vires

What 19 Eminent Law Professors Would Have You Believe

UCLA Law School Professor Stephen Bainbridge yesterday highlighted an amicus curiae brief filed recently by 19 law professors in Freidrichs v. California Teachers Ass’n. That case, which is now pending before the U.S....more

11/10/2015 - Freidrichs v CA Teachers Assoc Political Contributions Political Speech SCOTUS Shareholders Unions

Why The Capitol Is In The Capital?

Article III, Section 2 of the California Constitution provides that “Sacramento is the capital of California”.  The building in which the legislators meet, however, is denominated the “capitol” building.  Thus, the state...more

11/9/2015 - Legal Writing

I’m Guessing That The DOL Didn’t Have in Mind Negative Weighing OF ESG Factors

In this post, I noted a recent study by Professor Tracie Woidtke at the University of Tennessee concluding that social-issue shareholder-proposal activism appears to be negatively related to firm value. I therefore raised...more

11/6/2015 - Administrative Interpretation CalPERS CalSTRS Corporate Governance Corporate Social Responsibility DOL Fiduciary Duty Pension Funds Shareholder Activism Shareholders

A Hollow Nickel, Hollywood And Texas Gulf Sulphur

If you’ve taken a course in securities law, you’ve undoubtedly heard of, and I hope have read, SEC v. Texas Gulf Sulphur Co., 401 F.2d 833 (2d Cir.), cert. denied, 394 U.S. 976 (1968). That case is famous for the Second...more

11/5/2015 - Insider Trading Mining SEC Stock Options

What’s So Special About An 80% Doing Business Threshold?

In yesterday’s post, I dipped into the SEC’s proposed amendments to Rule 147, a safe harbor for intrastate offerings exempt from registration pursuant to Section 3(a)(11) of the Securities Act of 1933.  Among other things,...more

11/4/2015 - Proposed Regulation Rule 147 Safe Harbors SEC Securities Act of 1933 Transacting Intrastate Business

Rule 147 Changes May Cause Uptick In California Securities Qualifications

As has been widely noted, the Securities and Exchange Commission has proposed amending Rule 147 under the Securities Act of 1933.  That Rule provides a safe harbor for compliance with the Section 3(a)(11) exemption from...more

11/3/2015 - Principal Place of Business Proposed Amendments Public Offerings Rule 147 Safe Harbors SEC Securities Act of 1933 Transacting Intrastate Business

ISS Proposes To Go Overboard In Proposed Policy Change

Institutional Shareholder Services Inc. (ISS) is a very influential purveyor of proxy advisory services.  As part of ISS’ annual policy update procedure, ISS recently released a proposed policy change with respect to...more

11/2/2015 - Board of Directors Comment Period Corporate Governance Directors ISS Proxy Season Publicly-Traded Companies

Nevada Supreme Court Opines On Scope Of Debtor’s Exemption For Stock

NRS 78.746 provides that, with several qualifications, the exclusive remedy of judgment creditors with respect to the stock in a relatively closely held corporation is to charge a stockholder’s shares.  To the extent so...more

10/30/2015 - Assignees Bankruptcy Code Chapter 7 Closely Held Businesses Judgment Creditors Shareholders Stocks

Chancellor Bouchard Rules There Can Be No Ratification Without Works

In reading Chancellor Andre G. Bouchard’s ruling yesterday in Espinoza v. Zuckerberg, 2015 Del. Ch. LEXIS 273 (Del. Ch. 2015), I was reminded of the theological debate among Christians concerning justification by faith.  The...more

10/29/2015 - Board of Directors Business Judgment Rule Corporate Governance Delaware General Corporation Law Facebook Fairness Standard Independent Boards Mark Zuckerberg Ratification Shareholder Approval

California’s Secured Promissory Note Exemption

The line between real property transactions and securities transactions is not always clear.  California Corporations Code Section 25100(p) provides an exemption for a promissory note secured by a lien on real property...more

10/28/2015 - Liens Promissory Notes Real Estate Investments Real Estate Transfers Securities

Court Rules Directors Are Agents

Last August, I wrote that Magistrate Judge Joseph C. Spero would soon be deciding whether a director might be an agent of the corporation.  See Court Poised To Decide Whether Directors Are Agents.  The case, Wadler v. Bio-Rad...more

10/27/2015 - Board of Directors Designated Agent Directors FCPA Personal Liability Sarbanes-Oxley Separation of Powers

“Conforming With” May Not Be “Pursuant To”

Lawyers often will write “pursuant to [name of law or regulation]” without expecting the phrase to be the source of controversy.  But language is an inherently ambiguous tool and lawyers will, if adequately feed, argue about...more

10/26/2015 - Appeals Contract Interpretation Legal Writing

New Law Attempts To Clarify Legal Status Of LLC Employee Membership Purchase And Option Plans

California Labor Code Section 407 may be a bit of a surprise to many lawyers both in and outside of the state.  It provides: Investments and the sale of stock or an interest in a business in connection with the securing of a...more

10/23/2015 - Advertising Employee Stock Purchase Plans Hiring & Firing Labor Code Public Policy Shareholders Stock Options

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