News & Analysis as of

Securities California

Allen Matkins

Is A Change In Transfer Restrictions In A Shareholder Agreement Subject To Qualification?

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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

Allen Matkins

Does Amending A Shareholders Agreement Require Qualification Under The California Corporate Securities Law?

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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

Allen Matkins

Want Of Privity Evidence Dooms Class Claims Against Blockchain Company

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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

Allen Matkins

There Are Four Answers To The Question "Is A Limited Liability Company Interest Is A Security Under California Law?"

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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

Allen Matkins

Selling Unqualified Securities?  There's Are/Were Apps For That

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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

Allen Matkins

Chamber Of Commerce Highlights Some Differences Between SEC And California Climate Disclosure Mandates

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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

Allen Matkins

Is There A California Connection To Kirschner?

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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

Allen Matkins

Department Of Financial Protection & Innovation Warns Investors About Nonexistent Class Action Settlement

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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

Allen Matkins

Judge Rules That A Front For Mexican Cartel Had The Capacity To Protect Its Own Interests

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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

Allen Matkins

Reverse Stock Splits And The California Corporate Securities Law

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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

Allen Matkins

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

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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

Court Finds Presentation To Regulators Was An Official Proceeding And Why That Is Important

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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

Allen Matkins

Is An Option Exercise Non Bis In Idem?

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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

Allen Matkins

How Long Is Six Months?

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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

Allen Matkins

Are Securities Law And Unfair Competition Law Claims Miscible?

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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

Allen Matkins

Whom Should The Law Protect - The Borrower/Issuer Or Lender/Purchaser?

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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

Allen Matkins

When Betting Crosses Regulatory Lines

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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

Allen Matkins

A Field Guide To Issuer And Nonissuer Transactions

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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

Allen Matkins

When A 20% Interest May Be a 40% Interest

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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

Allen Matkins

DFPI Goes Multimedia In Recent Crypto Enforcement Actions

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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

Allen Matkins

Are Reverse Stock Splits Subject To Qualification In California?

Allen Matkins on

In this post published yesterday, John Jenkins discussed a proposed Nasdaq rule regarding notification and disclosure of reverse stock splits.  In light of John's post, I thought a brief refresher on California's treatment of...more

Allen Matkins

California Securities Claims Can Transend Even Death

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As has been discussed in previous posts, Part 5 of the Corporation Securities Law of 1968 establishes violations and Part 6 prescribes remedies.  For example, Corporations Code Section 25401 in Part 5 provides, in part, that...more

Allen Matkins

SEC Files Desist & Refrain Order Against Coinbase Alleging Failure To Qualify Staking Rewards Program

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Yesterday, the California Department of Financial Protection & Innovation announced that it had issued a desist and refrain order against Coinbase, Inc. The order alleges that Coinbase's staking rewards program involved the...more

Allen Matkins

California Bill Would Require Notice To The Attorney General 6 Months Before Making Any Purchase From A Grocery Store!

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California Assemblymember  Brian Maienschein has introduced a bill, AB 853, that seemingly would impose a notification burden on just about anyone anywhere...more

Allen Matkins

Assembly Member Takes Another Run At Digital Financial Asset Law

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In June of last year,  noted the introduction of a bill that would subject digital financial asset businesses to licensing in California. In September, Governor Gavin Newsom vetoed the bill stating that it would be "premature...more

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