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Blogs 1 - 25 of 1000
californiacorporate&securities 9/22/2017
Did The SEC’s Pay Ratio Guidance Miss Conjunction Junction?

Last week, the Securities and Exchange Commission issued interpretive guidance to assist issuers in complying with the pay ratio rule.  At the same time, the Division of Corporation Finance staff issued guidance concerning how companies might use statistical sampling technologies and “other reasonable methods” in implementing the pay ratio rule.  I am sure that both…

The post Did The SEC’s Pay Ratio Guidance Miss Conjunction Junction? appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 9/21/2017
California Bill May Spur Rewriting Gender Boilerplate

On the penultimate day of the current session, the California legislature passed SB 179 (Atkins & Wiener).  If signed into law by Governor Brown, this bill would enact the California Gender Recognition Act.  In general, SB 179 would create a third, nonbinary gender option on a California driver’s license, identification card, and birth certificate.  It also would…

The post California Bill May Spur Rewriting Gender Boilerplate appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 9/20/2017
Does California Side With Delaware Or New York On Special Litigation Committee Reviews?

As discussed in the two preceding posts, Nevada’s Supreme Court last week decided to adopt New York’s standard of review of special litigation committee recommendations to dismiss stockholder derivative suits.  In re Dish Network Derivative Litigation, 133 Nev. Adv. Op. 61 (2017).  The New York Court of Appeals described this standard as follows: While the substantive aspects of a…

The post Does California Side With Delaware Or New York On Special Litigation Committee Reviews? appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 9/19/2017
Review Of Special Litigation Committee Recommendations

Yesterday’s post limned the Nevada Supreme Court’s adoption of New York’s Auerbach standard of review for special litigation committee recommendations.  In re Dish Network Derivative Litigation, 133 Nev. Adv. Op. 61 (2017).  The Supreme Court unequivocally required that the trial court apply Auerbach at an evidentiary hearing : Pursuant to Auerbach, 393 N.E.2d at 996, and consistent with…

The post Review Of Special Litigation Committee Recommendations appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 9/18/2017
Nevada Favors New York Over Delaware Precedent For SLC Review

Nevada law endows a board of directors “full control over the affairs of the corporation”.  NRS 78.120(1).  This control is subject only to such limitations as may be provided by NRS chapter 7, or the articles of incorporation of the corporation.  Id.  This means the board controls decisions about whether the corporation should bring suit.  The ability…

The post Nevada Favors New York Over Delaware Precedent For SLC Review appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 9/15/2017
California Bill Deadline Is Today

Former New York Surrogate Gideon J. Tucker would be happy today.  Pursuant to Joint Rule 61(a)(15), today is the last day for California’s legislature to pass bills.  Today, also marks the beginning of the legislature’s interim study recess (Joint Rule 51(a)(4)).  Governor Brown will have until October 15 to sign or veto bills passed by the legislature…

The post California Bill Deadline Is Today appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 9/14/2017
There’s No Dressing This Up – Item 303(a)(1) Of Regulation S-K Is Unreasonable

In less than a month, the United States Supreme Court will hear oral argument in Leidos, Inc. v. Indiana Public Retirement System (Docket No. 16-581).  The question presented in Leidos is: Whether the Second Circuit erred in holding – in direct conflict with the decisions of the Third and Ninth Circuits – that Item 303…

The post There’s No Dressing This Up – Item 303(a)(1) Of Regulation S-K Is Unreasonable appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 9/13/2017
Nevada Precedes Delaware In Blockchain Legislation

On July 21, 2017, Delaware’s 74th Governor, John Carney, signed SB 69 into law.  This legislation amended various provisions of Delaware’s General Corporation Law (Title 8, Delaware Code) ostensibly to establish express statutory authority for Delaware corporations to use networks of electronic databases for the creation and maintenance of corporate records, including the stock ledger.  These databases are…

The post Nevada Precedes Delaware In Blockchain Legislation appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 9/12/2017
This California Court Held That A Limited Partnership Is No Person

In preceding posts, I commented on the multifarious definitions of “person” in the Securities Act of 1933, the Exchange Act of 1934 and various laws within the California Corporations Code.  As noted, the Corporations Code’s definition of “person” is short but open-ended: “Person” includes a corporation as well as a natural person. Cal. Corp. Code § 18. …

The post This California Court Held That A Limited Partnership Is No Person appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 9/11/2017
Multifarious Meanings of “Person”

Last Friday, I observed that the definitions of “person” found in the Securities Act and the Securities Exchange Act are oddly incongruous. The California Corporations Code is similarly inharmonious.  Section 18 of the Code, which applies to the entire Corporations Code unless a provision or context requires otherwise, provides the most compendious and indeterminate definition:…

The post Multifarious Meanings of “Person” appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 9/8/2017
Are Limited Liability Companies “Persons”?

Limited liability companies did not exist when Congress enacted the Securities Act of 1933 and the Securities Exchange Act of 1934.  Therefore, it should be no surprise that as originally enacted these acts did not mention LLCs.  Congress has since amended both acts and references to LLCs can now be found in both acts.  Section…

The post Are Limited Liability Companies “Persons”? appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 9/7/2017
Ever Hear Of A Emphyteutic Leasehold?

I have often remarked on the debt that the Anglo-American legal lexicon owes to French and Latin.  Greek has made a much smaller contribution.  In reading Professor Peter Heather’s The Fall of the Roman Empire: A New History of Rome and the Barbarians (Oxford University Press), I came across a legal term of obviously Greek origin that I had…

The post Ever Hear Of A Emphyteutic Leasehold? appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 9/6/2017
Professor Robert J. Jackson Jr. Nominated To Become A Member Of The Securities And Exchange Commission

As Broc Romanek noted yesterday, President Donald Trump has nominated Columbia Law School Professor Robert J. Jackson, Jr. to become a member of the Securities and Exchange Commission.  Over the years, Professor Jackson’s name has made several appearances in this blog, including: Why Commissioner Gallagher Is Not Mistaken On Political Spending Disclosure Political Spending Disclosures –…

The post Professor Robert J. Jackson Jr. Nominated To Become A Member Of The Securities And Exchange Commission appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 9/5/2017
Something Appears To Be Awry With California’s Insider Trading Statute

I trust that by now most quotidien readers of this blog should be familiar with Corporations Code Section 25402 which declares insider trading to be unlawful.  Although the statute has been on the books since the enactment of the Corporate Securities Law of 1968, it doesn’t make a great deal of sense.  Here’s the unabridged text of the statute: It is…

The post Something Appears To Be Awry With California’s Insider Trading Statute appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 9/1/2017
Scienter In The News Again

In May, I wrote about Judge Gonzolo P. Curiel’s  decision to grant the defendants’ motion to dismiss federal and state securities law claims in Mueller v. San Diego Entm’t Partners, LLC, 2017 U.S. Dist. LEXIS 77643 (S.D. Cal. May 22, 2017).  I pointed out that Judge Curiel had ruled that scienter is required under Corporations Code Section 25401 but…

The post Scienter In The News Again appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 8/31/2017
“Lead Independent Director” Or “Presiding Director”?

Neither California nor Nevada require that a corporation have either a “lead independent director” or “presiding director” and yet many corporations state that they have such a position.  Why? Item 407(h) of Regulation S-K requires that if one person serves as both principal executive officer and chairman of the board, a company must disclose whether it has a “lead…

The post “Lead Independent Director” Or “Presiding Director”? appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 8/30/2017
Bylaws And Supermajority Board Voting Requirements

Yesterday’s post concerned various provisions that, although not required to be included in the articles of incorporation, must be included if they are to be effective.  One of these provisions relates to supermajority voting requirements: A provision requiring, for any or all corporate actions (except as provided in Section 303 [removal of directors without cause],…

The post Bylaws And Supermajority Board Voting Requirements appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 8/29/2017
Putting These Provisions In Bylaws Won’t Be Sufficient

Section 202 of the California Corporations Code lists those provisions that must be included in a California corporation’s articles of incorporation in order for them the be accepted by the Secretary of State for filing.  There are a number of other provisions that although not required to be included in the articles won’t be effective…

The post Putting These Provisions In Bylaws Won’t Be Sufficient appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 8/28/2017
Still More On Suing The CEO For Social Activism

Last week, I devoted several posts to the question of suing the CEO for social activism.  The catalyst for the discussion was an August 17, 2017 Op-Ed piece by Jon L. Pritchett and Ed Tiryakian in The Wall Street Journal.  That piece cited recent CEO resignations from the White House’s Council on Manufacturing and Target’s adoption…

The post Still More On Suing The CEO For Social Activism appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 8/25/2017
Shareholder Derivative Suit Or Derivative Action?

I have long puzzled over the question of which is correct – “derivative suit” or “derivative action”?  Historically, the term “suit” was used for proceedings in equity.  California courts have generally regarded shareholder derivative claims as equitable.   Nelson v. Anderson, 72 Cal. App. 4th 111, 127, 84 Cal. Rptr. 2d 753, 763 (1999).  Thus, one might…

The post Shareholder Derivative Suit Or Derivative Action? appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 8/24/2017
More On Suing The CEO For Social Activism

The last few days, I’ve been writing about the legal issues raised by Jon L. Pritchett and Ed Tiryakian in a recent opinion piece published by The Wall Street Journal.  To sum up the discussion so far, Professor Stephen Bainbridge responded to Messrs. Pritchett and Tiryakian by arguing that the business judgment rule should bar…

The post More On Suing The CEO For Social Activism appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 8/23/2017
Suing The CEO For Social Activism Is Likely To Be Challenging Under Nevada Law

Yesterday’s post concerned asked the question whether shareholders can sue CEOs for social activism.  The answer is of course, yes.  The more interesting question is whether shareholders will win the suit.  To answer that question, one must first decide on what law applies.  Although many may assume that the law of the state of incorporation should govern,…

The post Suing The CEO For Social Activism Is Likely To Be Challenging Under Nevada Law appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 8/22/2017
Can Shareholders Sue CEOs For Corporate Social Activism?

In an August 17, 2017 opinion piece published in The Wall Street Journal, Jon L. Pritchett and Ed Tiryakian had the following message for shareholders: Our message to small shareholders of companies like Starbucks, Merck and Target: You can sue when a CEO decides to institute a corporate social-responsibility program that has no benefit to the business.…

The post Can Shareholders Sue CEOs For Corporate Social Activism? appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 8/17/2017
A Subsidiary Post

Not too long ago, I wrote about the Securities and Exchange Commission’s confusing classification of subsidiaries.  See The Case Of The Wholly Owned, But Not Totally Held, Subsidiary That May Or May Not Be 100% Owned.  Since this blog is concerned primarily with California corporate and securities laws, I would be remiss in not adding a…

The post A Subsidiary Post appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 8/16/2017
Under The Public Records Act, A Losing Party May Be The Prevailing Party

When the California legislature enacted the Public Records Act,  it declared “access to information concerning the conduct of the people’s business is a fundamental and necessary right of every person in this state”.  Gov’t Code § 6250.  The legislature was serious, granting “any person may institute proceedings for injunctive or declarative [sic] relief or writ of…

The post Under The Public Records Act, A Losing Party May Be The Prevailing Party appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
Blogs 1 - 25 of 1000