In my experience, many securities lawyers are well versed in the federal securities laws, but have little experience with state securities laws. This is understandable because federal law in many cases preempts state...more
The definition of a "security" Section 25019 was modeled after the definition in Section 2(a)(1) of the Securities Act of 1933, albeit with some notable differences. Both laws broadly define the term and therefore cover a...more
I recently wrote about the Securities and Exchange Commission's announcement that it had settled "charges" against several entities for failing to file time Forms D. One of the entities settling with the SEC is a registered...more
California's securities qualification requirements and exemptions depend upon whether the offer and sale of securities is an issuer transaction, a change in rights, exchange, merger, or conversion transaction, or a nonissuer...more
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
A significant amount of background is required to answer the question of whether amending a shareholders agreement is subject to qualification under the California Corporate Securities Law. As an initial matter, the CSL...more
The California Corporate Securities Law of 1968 generally requires that the offer and sale of a security in an issuer transaction must be qualified unless exempt or not subject to qualification (due to preemption). Cal....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
If someone told my younger self that someday people would take photographs with their phones, I would have wondered where you would insert the film.* Today, the question would be "What is film?" When I headed the Department...more
Last year, the California legislature enacted two bills, SB 253 and SB 261 that purport to impose burdensome disclosure mandates on businesses. The legislature did so in spite of obvious constitutional infirmities. It was...more
Last summer, bankers and the lawyers who advise them breathed a collective sigh of relief when the Second Circuit Court of Appeals upheld a U.S. District Court's opinion that notes in a bank syndicated loan were not...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
California Corporations Code Section 25118(b) provides an exemption from the state's usury limitations for loans. The exemption is subject to several conditions. One condition is the existence of either a preexisting...more
4/15/2024
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California ,
Cartels ,
Corporations Code ,
Financial Institutions ,
Financial Services Industry ,
Financing ,
Lenders ,
Loans ,
Money Laundering ,
Securities ,
Usury
Meredith Ervine recently wrote about reverse stock splits and Nasdaq listed issuers. A reverse stock split is the "go to" solution for many listed issuers whose share prices fall below the minimum continued stock exchange...more
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
California's Anti-SLAPP statute is intended to cut short lawsuits "brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition . . .". Cal. Code Civ. Proc § 425.16(a) ...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
Statutory time periods can be ambiguous. For example, what does "six months" mean when one month has 28 or 29 days, other months have 30 days and still others have 31 days....more
When the Securities and Exchange Commission proposed to adopt a rule a rule requiring issuers to report day-to-day share repurchase data once a quarter and to disclose the reason why the issuer repurchased shares of its own...more
Recently, I wrote about the ruling in Cress v. Nexo Financial LLC, 2023 WL 6609352 (Oct. 10, 2023). Today's post covers a different issue addressed in that case - to what extent does California's securities law preclude...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
Earlier this week, Suzanne Cosgrove wrote about the Commodity Futures Trading Commission's decision to prohibit Congressional Control Contracts, which it described as "cash-settled, binary (yes/no) contracts based on the...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
The possible application of California's Corporate Securities Law of 1968 may not be the first thing that comes to mind when amending charter documents. However, Section 25120 of the California Corporations Code makes it...more
Early this week, the California Department of Financial Protection and Innovation issued desist and refrain orders alleging violations by the following individual and entities...more