A Truly Piscatory Exemption

California's blue sky law, the Corporate Securities Law of 1968, generally requires that offers and sales of securities be qualified unless the security or transaction is exempt or not subject to qualification.  Most exemptions are conveniently located in the CSL or the rules of the Commissioner of Financial Protection & Innovation.  Occasionally, however, I run across exemptions in other laws.  

One such exemption can be found in California's Fish Marketing Act.  The California legislature enacted this act in 1957 to "promote, foster, and encourage the intelligent and orderly marketing of fish and fishery products through cooperation; to eliminate speculation and waste; to make the distribution of fish and fishery products between producer and consumer as direct as can be efficiently done; and to stabilize the marketing of fish and fishery products".   Cal. Corp. Code § 13201.  The law provides for the organization of corporations, which it refers to as "associations".  Cal. Corp. Code § 13202(c).  

The Fish Marketing Act gives these associations a complete pass when it comes to compliance with the CSL.  Corporations Code Section 13205 provides:

No association is subject in any manner to the terms of the Corporate Securities Law and all associations may issue their membership certificates or stock or other securities as provided in this division without the necessity of any permit from the Commissioner of Business Oversight.

The breadth of this exemption is breathtaking, for it relieves fish marketing associations not only from the CSL's qualification requirements but also from its antifraud provisions.