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californiacorporate&securities 10/13/2014
SEC ALJs Face Free Enterprise Challenge

Several years ago, I testified as an expert witness in an administrative proceeding brought by the Securities and Exchange Commission.  The hearing was held in what looked like a courtroom before what appeared to be a judge and with lawyers for the SEC and the respondent.  However, the presiding officer was not an Article III judge and his decision was […]

The post SEC ALJs Face Free Enterprise Challenge appeared first on California Corporate & Securities Law.

 
californiacorporate&securities 10/9/2014
Why Does Determining A Quorum Have To Be So Complicated?

California’s quorum requirement for meetings of directors appears on its face to be straightforward – a majority of the authorized number of directors constitutes a quorum of the board for the transaction of business.  Cal. Corp. Code § 307(a)(7).  Leaving aside the possibility of an exception in the articles or bylaws (a subject for another post), it’s hard to imagine that […]

The post Why Does Determining A Quorum Have To Be So Complicated? appeared first on California Corporate & Securities Law.

 
californiacorporate&securities 10/8/2014
Court Of Appeal Embraces De Facto LLC Dissolution

Under the former Beverly-Killea Limited Liability Company Act, a limited liability company was dissolved upon the first to occur of any of the following three events: The occurrence of an event specified in its governing documents; A majority vote of the members to dissolve; or A judicial decree of dissolution. Cal. Corp. Code § 17350 (repealed).  The California Revised Uniform Limited […]

The post Court Of Appeal Embraces De Facto LLC Dissolution appeared first on California Corporate & Securities Law.

 
Social Media & Employment Law Blog for California Employers 10/7/2014
BET Prevails in Dispute With Former Worker Over Facebook Account

A recent case from the District of Southern Florida highlights the importance of clearly defined guidelines for workers or employees managing the employers’ social media accounts. Mattocks v. Black Entm’t Tv LLC, concerned a dispute between Black Entertainment Television LLC (“BET”) and Mattocks, whom it had hired to manage a Facebook Fan Page for one of its television programs, “The […]

The post BET Prevails in Dispute With Former Worker Over Facebook Account appeared first on Social Media and Employment Law.

 
californiacorporate&securities 10/7/2014
Imposing The Corporate Death Penalty

In this post published yesterday, UCLA Law Professor Stephen Bainbridge challenges the following statements attributed to Robert F. Kennedy Jr.: I do, however, believe that corporations which deliberately, purposefully, maliciously and systematically sponsor climate lies should be given the death penalty.  This can be accomplished through an existing legal proceeding known as “charter revocation.”  State Attorneys General can invoke this remedy […]

The post Imposing The Corporate Death Penalty appeared first on California Corporate & Securities Law.

 
californiacorporate&securities 9/29/2014
1, 2 or 3 Years? How Should Boards Decide The Frequency Of Say-On-Pay Votes?

Although the initial ruckus over how to determine the outcome of executive compensation say-on-frequency votes has subsided, I still maintain that the Securities and Exchange Commission botched the rule (§240.14a-21(b)).  More importantly, it seems many boards don’t understand the challenges with ascertaining and applying stockholder preferences after the votes have been counted.  At the time, I advocated for the use […]

The post 1, 2 or 3 Years? How Should Boards Decide The Frequency Of Say-On-Pay Votes? appeared first on California Corporate & Securities Law.

 
californiacorporate&securities 9/12/2014
A Bad Review For California’s New Non-Disparagement Law

The advent of social media has dramatically lowered the cost to consumers of acquiring and disseminating information.  Formerly, only a handful of people might hear about a bad experience with a retailer or service provider.  Now, it’s possible for a consumer to kvetch online before an audience of millions.  Whether consumer criticisms are accurate and justified or false and malicious, a business is likely […]

The post A Bad Review For California’s New Non-Disparagement Law appeared first on California Corporate & Securities Law.

 
Social Media & Employment Law Blog for California Employers 9/8/2014
See If You “Like” This: NLRB Rules That Commenting on or Liking Another’s Facebook Post Can Constitute Protected Activity

The NLRB recently ruled that employees’ use of Facebook’s “like” button can constitute protected concerted activity under Section 7 of the National Labor Relations Act, and that the employer’s termination of the employees was an unfair labor practice under the Act. The employees worked at Triple Play Sports Bar and Grille, and were non-unionized. It all started when an ex-employee complained […]

 
californiacorporate&securities 8/26/2014
Company Sues Former Officer For Failing To File Form 4s

A complaint filed in the Central District of California caught my eye because it involved the rather unusual circumstance of a corporation suing a former director and officer for, among other things, failing to file reports under Section 16(a) of the Securities Exchange Act of 1934.  The case, Micro Imaging Techn., Inc. v. Brennan (C.D. Cal. Case No. 2:14-cv-06560), was first […]

The post Company Sues Former Officer For Failing To File Form 4s appeared first on California Corporate & Securities Law.

 
California Wireless Law Blog 8/19/2014
Balancing Act

Expanding wireless coverage oftentimes involves balancing two competing interests – (1) those of the general public who continue to demand the fastest, strongest and most technologically advanced wireless service, and (2) those of the individuals in the immediate vicinity of cellular towers needed to provide that service, whose views and other aesthetic considerations could be impacted by such towers.  A […]

The post Balancing Act appeared first on California Wireless Law.

 
californiacorporate&securities 8/7/2014
Did Abraham Lincoln Engage In The Unauthorized Practice Of Law?

I recently learned that I’m supposedly related to a certain Joshua Short, late of Sangamon County, Illinois.  I don’t know much about Mr. Short other than he was a farmer who couldn’t write his own name and wasn’t feeling very well in the summer of 1836.  Infirmity has a way of turning one’s thoughts to mortality.  And so it seems […]

The post Did Abraham Lincoln Engage In The Unauthorized Practice Of Law? appeared first on California Corporate & Securities Law.

 
californiacorporate&securities 8/6/2014
This Court’s Ruling Puts The Opinion In Auditor’s Internal Control Opinion

A brief ruling issued this week by U.S. District Court Judge James C. Mahan makes it clear that an auditor isn’t always liable even when a subsequent auditor uncovers fraud.  In Oaktree Capital Mgmt., L.P. v. KPMG, 2014 U.S. Dist. LEXIS 106538 (D. Nev. 2014), the plaintiffs had purchased notes issued by a company that later defaulted and went bankrupt. […]

The post This Court’s Ruling Puts The Opinion In Auditor’s Internal Control Opinion appeared first on California Corporate & Securities Law.

 
californiacorporate&securities 8/1/2014
As Samuel Goldwyn Reportedly Said: “Include Me Out”

A lawyer aims at precision that can never be achieved because of the bluntness of his tool – language.  Consider the word “including”.  Is it a term of enlargement or limitation?  It is a term of enlargment when the intent is to provide a non-exclusive list.  It is a term of limitation when the intent is to limit the scope […]

The post As Samuel Goldwyn Reportedly Said: “Include Me Out” appeared first on California Corporate & Securities Law.

 
californiacorporate&securities 7/31/2014
Delaware Likes Garner/California Not So Much

In 1970, Richard Nixon was president, the 26th Amendment was still not part of the Constitution, and the Fifth Circuit Court of Appeals issued its opinion in Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970).  In that case, Judge Godbold wrote: The attorney-client privilege still has viability for the corporate client.  The corporation is not barred from asserting it […]

The post Delaware Likes Garner/California Not So Much appeared first on California Corporate & Securities Law.

 
californiacorporate&securities 7/14/2014
Why Doesn’t The SEC Post SubCommittee Recommendations?

Last Thursday, the Investor Advisory Committee held another meeting.  The agenda included this rather vague agenda description: Discussion of Definition of Accredited Investor (which may include a recommendation of the Investor as Purchaser Subcommittee) The actual meeting did in fact include a discussion of the recommendation of the subcommittee.  The recommendation, however, was (and as of July 13 was still) not posted. [...]

 
California Wireless Law Blog 7/9/2014
Nokia Buys SAC Wireless To Increase U.S. Business

Nokia has acquired indoor wireless specialist SAC Wireless to help boost its network deployment business and wireless network infrastructure in the U.S. SAC Wireless specializes in deploying small cells and using antenna systems to improve wireless coverage in densely-populated, public places. The acquisition should help Nokia expand into the growing small cell market, as mobile network providers have increased their […]

 
diversity&community 6/30/2014
Rachel’s Women’s Center Provides Support for San Diego Homeless Women

porters Mark Hattam and Heather Riley share how the Rachel’s Women’s Center helps homeless and very low-income women in San Diego get back on their feet. The center provides a safe, supportive, sober environment for women with few or no resources to gather, begin and continue self-help efforts. [...]

 
californiacorporate&securities 6/24/2014
How Confused Is This? California Defines LLCs Subject To New Law To Include Foreign LLCs

The California Revised Uniform Limited Liability Company Act. which took effect on January 1 of this year, provides the statutory framework for the formation and operation of limited liability companies.  The law appears to distinguish between a “limited liability company” and a “foreign limited liability company”.  As might be expected, a “limited liability company” is defined (except in the phrase “foreign [...]

 
californiacorporate&securities 6/17/2014
This Legislative Lacuna Looms Large In RULLCA

I expect that most limited liability company operating agreements specify how profits and losses are to be allocated among members.  Sometimes, they may not.  The now repealed Beverly-Killea Act provided a default provision for just this contingency, former Corp. Code § 17202.  A similar default rule can be found in the California Revised Uniform Limited Partnership Act of 2008, Cal. Corp. [...]

 
californiacorporate&securities 6/16/2014
Commissioner Rings Pension Fund Tocsin

In a speech given late last month, SEC Commissioner Daniel M. Gallagher warned that “for years, state and local governments have used lax governmental accounting standards to hide the yawning chasm in their balance sheets.”  According to Commissioner Gallagher, pension funds have been committing two fundamental errors.  First they are overstating investment returns.  He noted that many funds assume a return [...]

 
californiacorporate&securities 6/12/2014
Nevada Exculpation Statute Leads To Dismissal Of Claims Against Erstwhile Officer

Nevada, unlike either California or Delaware, exculpates corporate officers from liability to the corporation for any damages as a result of “any act or failure to act” in his or her capacity as an officer unless it is proven that (i) the officer’s action or failure to act constituted a breach of his or her fiduciary duties as an officer; [...]

 
californiacorporate&securities 6/11/2014
How A Public Records Act Request Can Be Better Than A Subpoena Duces Tecum

The California counterpart to the Freedom of Information Act (aka FOIA) is the Public Records Act, Government Code Section 6250 et seq.  In a recent unpublished decision, the Court of Appeal succinctly explains why submitting a Public Records Act request may yield more comprehensive results than a subpoena: Generally, a California Public Records Act request is more beneficial to the requesting party [...]

 
California Wireless Law Blog 6/9/2014
Bay Area Residents Want More Wireless Towers

A 2014 Bay Area Council Poll found overwhelming support among residents for installation of new antennae, cell towers and fiber optic cables in their city.  According to over 1,000 residents surveyed, a whopping 74 percent say it’s time to upgrade and modernize communications systems to ensure faster mobile and Internet services. Such widespread support isn’t surprising — a majority of […]

 
californiacorporate&securities 6/6/2014
Do You Want Your Lawyer To Be Horatius Or Atticus Finch?

I was profoundly disheartened by these recent remarks by SEC Commissioner Kara M. Stein: Are we treating lawyers differently from other gatekeepers, such as accountants?  I think we should carefully review the role that lawyers play in our markets, with a view towards how they can better help deter misconduct and prevent fraud. We should be considering attestations in new areas.  [...]

 
californiacorporate&securities 6/5/2014
What Good Can Come From Letting The Indifferent and Undecided Hold Sway?

I’ve written many posts on the subject of voting because it seems so straightforward and yet turns out to be complex.  In tackling any voting problem, it is important to know and understand the applicable voting rule.  An example of a voting rule can be found in Section 708(c) of the California Corporations Code which prescribes the rule for director elections.  Unfortunately, [...]

 
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