Section 2254 of the California Corporations declares it a felony for a director, officer or agent of any corporation, whether domestic or foreign, to knowingly concur in making, publishing or posting either generally or privately to the shareholders or other persons any:
Notably, this provision is included within the General Corporation Law and not the Corporate Securities Law. Although the statute clearly establishes criminal liability, it does not address whether shareholders or others may pursue a private right of action.
The one court that has squarely addressed the question concluded :
"Section 2254 makes no reference, either in the statute itself or in the statutory structure, of any intent to create a private right of action. In fact, the language of the statute itself refers to the violation as being felonious."