SEC: Investment Adviser May Not Say That It May Do What It Already Did

Doug Cornelius at Compliance Building took note of an Securities and Exchange Commission order issued last Friday instituting proceedings against an investment adviser, Diastole Wealth Management, Inc., for inadequate disclosure of conflicts of...

Must A Corporation Have A Physical Location?

Gertrude Stein's  1933  book The Autobiography of Alice B. Toklas is well known.  Her 1937 sequel, Everybody's Autobiography, is not.  Despite the relative obscurity of Everybody's Autobiography, one line of the book is known to just about everyone...

Bad Faith Prosecution Of Trade Secrets Theft May Lead To Attorney's Fee Award (Or Not)

“If you want to keep a secret, you must also hide it from yourself.”― George Orwell, 1984

DFPI Mandates Electronic Filings

When I served as Commissioner of Corporations, the Department had no website and all files were maintained in paper form.  I initiated a project to create electronic records.  Long after my tenure ended, the Department of Business Oversight in 2014...

Securities Claim Fails Because Option Exercise Is Not A Sale

A recent decision by the Nevada Supreme Court highlights the definition of "sale" in Section 25017 of the California Corporations Code.  The suit arose from the plaintiff's claim that certain facts were not disclosed to him before he exercised his...

Agency Cannot Avoid Rulemaking By Contract

As has been noted over the years in this space, California strictly prohibits "underground regulations".   These are regulations adopted and enforced by state agencies without complying with the public notice and comment requirements of the...

Complaints About Cake Did Not Involve The Public Interest

"Qu'ils mangent de la brioche"

California Statute Permits Unlicensed "Small Dollar" Lending By Some Nonprofits

On the eve of the Great Depression, the United States Bureau of Printing and Engraving made a big change by introducing small bills.  The Bureau reduced the size of bills by about 30% to save money on ink and paper - the downsizing allowed 12 bills...

When A Director Is Unfit For Duty

The California General Corporation Law includes two provisions providing relief when a director is incompetent and/or felonious.  Section 302 of the Corporations Code permits the board of directors to declare vacant the office of a director who has...

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