One of the first registered public offerings that I worked on was for a small technology company. The lead underwriter was a regional investment banking firm. Although he had considerably more experience in securities law than me, the underwriters' counsel, Neal Brockmeyer, was not the least bit condescending. That was about three decades ago, and I remain in occasional touch with Neal and one of the investment bankers who worked on the offering. Recently, Neal reached out to me about an article that he will soon have published in the Loyola of Los Angeles Law Review.
Neal's article, entitled "Regulation of Securities Offerings in California: Is it Time for a Change After a Century of Merit Regulation?", begins by providing a comprehensive history of California's regulation of securities transactions from its beginnings in 1913. He even briefly recounts my doomed attempt to jettison merit review when I was Commissioner of Corporations in the mid-1990s. In Part IV, Neal provides extensive data about the number and types of filings that are currently made with the Department of Business Oversight. For example, did you know that the DBO in 2018 issued permits to applicants seeking to raise almost $3.9 billion in church fund securities and debt?
Neal concludes that "it is time for a change in the method of regulating the offer and sale of securities in California that would eliminate or limit the system of merit review, with a view to enhancing the antifraud enforcement of the California securities law."
I continue to believe that states have a role to play in securities regulation and Neal's article provides much to think about in this regard. The current draft of Neal's article is available here.