Professor Ann Lipton recently wrote about an ingenious scheme developed by the Federal Bureau of Investigation that has resulted in indictments of 18 individuals and entities for alleged fraud and manipulation in the crypto...more
Section 25401 of the California Corporations Code declares generally declares unlawful to make false statements of a material fact or or omit material facts when buying or selling a security. It is therefore similar to Rule...more
Securities law practitioners know that Section 5(a) of the Securities Act of 1933 generally makes it unlawful to sell a security unless a registration statement is in effect, or the security or the transaction is exempt. ...more
In this post published yesterday, John Jenkins discussed a proposed Nasdaq rule regarding notification and disclosure of reverse stock splits. In light of John's post, I thought a brief refresher on California's treatment of...more
A new paper ostensibly connects the dots between failing to file a Form D, as required by Regulation D, and "patent trolls". A "patent troll" is a company, typically that does not produce any product or provide any service,...more
In a recent post on the Harvard Law School Forum on Corporate Governance, Jai Massari discusses a new paper that argues fungible cryptoassets are not securities under existing U.S. federal securities laws while initial coin...more
Rule 506(c) under the Securities Act of 1933 allows an issuer to solicit and generally advertise an offering exempt pursuant to Regulation D if...more
In this post yesterday, John Jenkins took aim at issuer's that characterize themselves as "leading". He notes that the SEC Staff has and continues to comment on such characterizations. I think that in some cases these...more
Item 601(b)(5)(i) of Regulation S-K requires that all filings under the Securities Act of 1933 include as an exhibit an opinion of counsel regarding the legality of the securities being registered, indicating whether they...more
Many law firms will undoubtedly publish alerts on yesterday's decision by the Ninth Circuit Court of Appeals in Pirani v. Slack Techs., 2021 U.S. App. LEXIS 28319. The court held that arose from the New York Stock...more
In the wake of the U.S. Supreme Court's decision in Cyan Inc. v. Beaver Co. Employees Retirement Fund, 138 S. Ct. 1061 (2018) and the Delaware Supreme Court's subsequent holding Salzberg v. Sciabacucchi, 227 A.3d 102 (2020),...more
On August 26, 2020, the Securities and Exchange Commission (the SEC) adopted modernizing amendments to the definition of “accredited investor” in Rule 501(a) of Regulation D (Rule 501(a)) to add new categories of qualifying...more
Both the Securities Act of 1933 and the California Corporate Securities Law of 1968 define the term "security" by providing a long and varied list of financial instruments and contractual relationships. Neither law mentions...more
Securities lawyers typically concern themselves with the federal securities laws (principally, the Securities Act of 1933, the Securities Exchange Act of 1934, and the two '40 Acts) and state "blue sky" laws (in California,...more
The big news yesterday in corporate jurisprudence was the Delaware Supreme Court's decision in Salzberg v. Sciabacucchi in which the Delaware Supreme Court upheld forum selection charter provisions that require claims under...more
Section 11 of the Securities Act is an anti-fraud statute. Like its Exchange Act cousin, Section 10(b), Section 11 requires (i) an omission or misrepresentation, and (2) that the omission or misrepresentation be material,...more
Treasury shares are shares that a corporation has issued and then reacquired but not retired. Hence, they are shares that have been issued but are no longer outstanding. In some states, treasury shares retain some legal...more
On Monday, the trustee of the Woodbridge Liquidation Trust filed a lawsuit against numerous law firms and lawyers. The trustee's lawsuit relates to the reportedly $1.3 billion Ponzi scheme allegedly orchestrated by Robert H....more
12/5/2019
/ Anti-Fraud Provisions ,
Consent Order ,
Corporations Code ,
Criminal Prosecution ,
Department of Business Oversight ,
Fraud ,
Ponzi Scheme ,
Rule 10b-5 ,
Scienter ,
Securities Act of 1933 ,
Securities Exchange Act
Last August, Nevada Secretary of State Barbara Cegavske issued a Summary Order to Cease and Desist on Thomas Becker and Wellington Sports Club, LLC, Einstein Sports Advisory, Ltd., and Welscorp, Inc. The gist of Secretary of...more
In Sciabacucchi v. Salzberg, 2018 Del. Ch. LEXIS 578, Vice Chancellor J. Travis Laster ruled that a Delaware corporation’s certificate of incorporation and bylaws cannot restrict the forum in which stockholders may bring a...more
Anyone who has studied securities regulation has been exposed to the United States Supreme Court's decision in SEC v. W.J. Howey, 328 U.S. 293 (1946) establishing the definition of "investment contract" under the Securities...more
Both Corporations Code Section 25401 and Rule 10b-5 concern securities fraud. Section 25401, however, was modeled on Section 12(2) (now 12(a)(2)) of the Securities Act of 1933 while Section 10b-5 was adopted under Section...more
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...more
California's statutory definition of "security" lists by name two types of trust certificates - collateral trust certificates and voting trust certificates. Cal. Corp. Code § 25109. Both of these certificates are also found...more
Rule 506 is a non-exclusive safe harbor from the registration requirements of the Securities Act of 1933. If an offering meets the conditions of either Rule 506(b) or 506(c), it is deemed to not involve a public offering...more