It’s Not Too Late

As a reminder, the comment period ends today on the Department of Corporation's proposal to add a new rule, 260.004.1, to address concerns about the Court of Appeal's holding in People v. Cole, 156 Cal. App. 4th 452 (2007).  In that case, the court upheld the criminal convictions of two individuals for engaging in unregistered broker-dealer activity.  The individuals had claimed that they were exempt as agents.  The court disagreed stating that as officers they would not come within the exemption in Corporations Code Section 25004(a)(2) because they did not receive special compensation.

Commenting is easy.  All that is required is an email to  The email should reference PRO 09/09-A.  More information about the rule proposal is available on the Department's website.

For more background on the Cole decision, see my article, A Shot Not Heard—The Court of Appeal Holds that an Issuer’s Directors and Officers Must Be Licensed as Securities Broker-Dealers, Business Law News (Issue No. 3, 2008).  Members of the Business Law Section of the California State Bar can read this article online.