Contact us with your California corporate & securities law questions (949) 353-6347 or Contact us here

How Close A Relation Is Section 25110  To Section 12(a)?

Section 12(a) of the Securities Act of 1933 covers two types of civil liability.  Section 12(a)(1) concerns violations of Section 5 which imposes registration and prospectus delivery requirements on the offer and sale of securities.  Section 12(a)(2) is one of the two primary civil liability provisions under the Securities Act (the other being Section 11).  The U.S. Supreme Court, however, has limited the scope of Section 12(a)(2) to public offerings.  Gustafson v. Alloyd Co., 513 U.S. 561 (1995). 

Recently, I was surprised to see Section 25110 of the California Corporations Code described as "corresponding" to Section 12(a). Wong v. Tomaszewki, 2019 U.S. Dist. LEXIS 75308.  Section 255110 declares it unlawful to offer or sell in California any security in an issuer transaction unless it is (i) qualified under Sections 25111-25113, (ii) exempt from qualification, or (iii) not subject to qualification.  In this sense, Section 25110 could be considered to correspond to Section 12(a)(1).  Section 25110, however, says nothing about false or misleading statements.  Thus, it certainly shares no relationship with Section 12(a)(2).  The plaintiffs in Wong clearly missed this point as their alleged violation of Section 12(a) involved misstatements and not a failure to register under the Securities Act. 

 

Share on:

Corporate Securities Law

ANY QUESTIONS REGARDING CALIFORNIA CORPORATE AND SECURITIES LAW? CONTACT US DIRECTLY

We offer expert advice with the intricacies of California law.

Our years of experience and expertise allow us to help clients navigate the business laws in California.

CONTACT US

Get the latest news and analysis about California Corporate & Securities law. Subscribe to our newsletter today!

We respect your email privacy

ABOUT OUR AUTHOR

30172DBAB0084D3A8F39D7AF0A8E79BC.ashx Keith Paul Bishop
Partner at Allen Matkins
(949) 353-6328
 Contact me
Learn More About Keith

RECOGNITION

NationalLawReview

badge-author-large

nominee-badge

Get the latest news and analysis about California Corporate & Securities law. Subscribe to our newsletter today!

We respect your email privacy

CATEGORIES

see all

YOUTUBE

FACEBOOK