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Corporations Code Securities Fraud

Allen Matkins

Judge Rules Plaintiff Lacked Standing To Claim Damages Whilst Still Holding Securities

Allen Matkins on

Part 5 of the California Corporate Securities Law of 1968 sets forth a number of fraudulent and prohibited practices.  One of these practices is to "to offer or sell a security in this state, or to buy or offer to buy a...more

Allen Matkins

A Form D Is Not A Registration Statement And Why It Might Matter

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Securities law practitioners know that Section 5(a) of the Securities Act of 1933 generally makes it unlawful to sell a security unless a registration statement is in effect, or the security or the transaction is exempt. ...more

Allen Matkins

A Truly Piscatory Exemption

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California's blue sky law, the Corporate Securities Law of 1968, generally requires that offers and sales of securities be qualified unless the security or transaction is exempt or not subject to qualification.  Most...more

Allen Matkins

Why Privity Matters

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In 2011, I posed the following question: Is Privity Required Or Not Required Under Section 25500?  Section 25500 of the California Corporations Code provides the remedy for violations of Section 25400 which declares unlawful...more

Allen Matkins

Something Is Missing From Section 1203

Allen Matkins on

In 1988, the California legislature enacted a unique fairness opinion requirement for certain "interested party" tender offers, including a share exchange tender offers (Section 183.5) or written proposals for a written a...more

Allen Matkins

Securities Claim Fails Because Option Exercise Is Not A Sale

Allen Matkins on

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

Goodwin

Federal Reserve Hints at Government-Backed Cryptocurrency

Goodwin on

Federal Reserve Hints at Government-Backed Cryptocurrency; Third Circuit Affirms Dismissal of Securities Fraud Class Action Against Shutterfly Inc. Regarding Allegedly Misleading Financial Projections; Ninth Circuit Holds...more

Allen Matkins

Bharara Task Force Overlooks California Insider Trading Statute

Allen Matkins on

I have long advocated for a federal statutory definition of insider trading because I believe that the current approach has been for the courts to convict first and then explicate the theory supporting the conviction in a...more

Allen Matkins

Real Estate Development Runs Afoul Of California Securities Laws

Allen Matkins on

Yesterday, the California Department of Business Oversight issued this press release announcing that San Diego Superior Court Judge Joel R. Wohlfeil granted the DBO’s request for a temporary restraining order. The TRO bars...more

Allen Matkins

Is There Securities Fraud Without Reliance And Causation?

Allen Matkins on

Section 25401 of the Corporations Code is California's securities fraud statute. Readers of this space will know that that scienter was not required under the former version of the statute but that the legislature rewrote...more

Allen Matkins

The Case Of The Non-Existent Stock Options

Allen Matkins on

After starting employment at eCommission Solutions, LLC in 2015, Mr. Aja Doshi was offered the position of Vice President, Product Engineering. Among other things, the offer stated: "You will be granted one hundred fifty...more

Allen Matkins

Face It, Court Rules Plaintiff Must Be An Actual Seller To Maintain Securities Fraud Action

Allen Matkins on

A recent ruling by U.S. District Court Judge Cynthia Bashant reminds us that when it comes to securities fraud claims, a plaintiff is generally required to have either bought or sold a security. Melcher v. Fried, 2018 U.S....more

Allen Matkins

Section 25401 – Does No One Know Its History?

Allen Matkins on

A few years back, I criticized the amendment of California Corporations Code Section 25401 to conform to Rule 10b-5 under the Securities Exchange Act of 1934. See California Creates Complete Chaos By Rewriting Anti-Fraud...more

Allen Matkins

Scienter In The News Again

Allen Matkins on

In May, I wrote about Judge Gonzolo P. Curiel’s decision to grant the defendants’ motion to dismiss federal and state securities law claims in Mueller v. San Diego Entm’t Partners, LLC, 2017 U.S. Dist. LEXIS 77643 (S.D. Cal....more

Allen Matkins

Scienter Requirement May Be A Question Of Timing

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On several occasions, I have written about whether scienter is required under Corporations Code Section 25401. That question surfaced again last week in Judge Gonzolo P. Curiel’s ruling on the defendants’ motion to dismiss...more

Allen Matkins

What Do You Know? Bill Proposes To Eliminate Scienter

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Corporations Code Section 25401 is California’s basic securities antifraud statute...more

Allen Matkins

California Reverts To Former Securities Anti-Fraud Statute

Allen Matkins on

Readers of this blog will recall my chariness of a 2013 amendment to California’s basic securities anti-fraud statute.  See California Creates Complete Chaos By Rewriting Anti-Fraud Statute, But “We Are Against Fraud Aren’t...more

Allen Matkins

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

Allen Matkins on

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

Allen Matkins

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

Allen Matkins on

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

Allen Matkins

This Ruling Appears To “Unravel The Very Fabric Of The Space-time Continuum”

Allen Matkins on

In prior posts, I’ve cast a jaundiced eye on last year’s amendment of California’s general securities fraud statute, Corporations Code Section 25401. See Die Verwandlung: How The Legislature Likely Raised The Bar On...more

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