Last December, I wrote this post about Corporations Code § 25501.5 that asked “What do it mean?”. In general, the statute authorizes an action for rescission (or damages, if the security is no longer owned) by any person “who purchases a security from or sells a security to a broker-dealer that is required to be licensed and has not”. However, the statute makes little sense when the security was acquired in transaction in which the unlicensed broker-dealer acted as agent rather than as principal.

Which Statute of Limitations Governs?

More recently, U.S. District Court Judge Dana Sabraw struggled with another unanswered question involving Section 25501.5 – what is the applicable statute of limitations?