California Corporate & Securities Law

On several occasions, I have written about whether scienter is required under Corporations Code Section 25401.  That question surfaced again last week in Judge Gonzolo P. Curiel's ruling on the defendants' motion to dismiss federal and state...

Some persons may be deemed to violate the Corporate Securities Law of 1968 even though they did not directly violate the law. Corporations Code Section 25403(a) provides that a person who with knowledge directly or indirectly controls and induces...

In March, Snap Inc. announced that it and the selling stockholders had sold of 230 million shares of Class A Common Stock to the public at an initial public offering price of $17.00 per share. The gross proceeds of the offering to the company and...

Theranos' anni horrorum began in October 2015 with the publication of a story by investigative reporter John Carreyrou at The Wall Street Journal.  Lawsuits and government investigations ensued. Although the Theranos recently announced agreements...

Spring is the traditional season for cleaning and California's Corporations Code and securities rules are desperately in need of some tidying up.  In a very quick and incomplete review of the Code and the Commissioner's rules, I found the following:

Yesterday's post concerned the Court of Appeal's decision in People v. Black, 2017 Cal. App. LEXIS 130 (Cal. App. 6th Dist. Feb. 16, 2017). The case involved the criminal prosecution of an individual for making false statements in connection with...

Anyone who has studied securities regulation since 1946 should be familiar with the U.S. Supreme Court's definition of a "security" as enunciated by Justice Frank Murphy in S.E.C. v. Howey Co., 328 U.S. 293 (1946). That test asks "whether the scheme...

The list of instruments and interests included within the definition of a "security" in California Corporations Code Section 25019 is long. A franchise, however, is not to be found amongst the named. In fact, the statute specifically excludes a...

In December last, the Department of Business Oversight published the 2016 Commissioner’s Report on the Offer or Sale of Securities by Permit under Corporations Code Section 25113. This report, which is required by California Corporations Code...