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Does The Sheriff Need A Permit To Sell Shares?

Last week, I wrote about a recent Court of Appeal decision allowing for the possibility that a sale of shares at a sheriff's sale could amount to conversion.  Duke v. Superior Court, 2017 Cal. App. LEXIS 1116.  A fundamental principle underlying the California Corporate Securities Law of 1968 is that offers and sales of securities must be qualified, unless exempt or not subject to qualification.  This is true of both issuer transactions (Cal. Corp. Code § 25110) and nonissuer transactions (Cal. Corp. Code § 25130).

A sheriff's sale of shares pursuant to a writ of execution is a nonissuer transaction, i.e., a transaction not directly or indirectly for the benefit of the issuer.  See Cal. Corp. Code § 25011.  A sheriff won't have to worry about qualifying sales because Corporations code Section 25014(f) provides that the qualification requirements of Section 25130 do not apply to the following:

Any transaction by an executor, administrator, sheriff, marshal, receiver, trustee in bankruptcy, guardian, or conservator.

The word "sheriff" is derived from "shire" and "reeve".  A "shire" was a name a county in England and a "reeve" was an official appointed by the King.  The word appears multiple times in the Magna Carta. For example, Section 30 states: "Nullus vicecomes, vel ballivus noster, vel aliquis alius, capiat equos vel carettas allcujus liberi hominis pro cariagio faciendo, nisi de voluntate ipsius liberi hominis ("Let no sheriff, bailiff or anyone else, seize the horses or carts of any free man for making transport, except by the consent of the freeman himself").

 

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California Securities Laws, nonissuer transaction, reeve, Shire, Magna Carta, Section 25011, Section 25104(f), Section 25130, sheriff's sale

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30172DBAB0084D3A8F39D7AF0A8E79BC.ashx Keith Paul Bishop
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