AB 1255, as introduced, Pan. Corporations.
The Corporate Securities Law of 1968 provides for the regulation of the issuance of corporate securities and includes a civil remedy for specified issuers of securities for a specified violation of its provisions.
This bill would make technical, nonsubstantive changes to this provision.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 25502.5 of the Corporations Code is
2amended to read:
(a) begin deleteAnyend deletebegin insert Aend insert personbegin insert,end insert other than the issuerbegin insert,end insert who violates
4Section 25402 shall be liable to the issuer of the security purchased
5or sold in violation of Section 25402 for damages in an amount
6up to three times the difference between the price at which the
7security was purchased or sold and the market value which the
8security would have had at the time of the purchase or sale if the
9
information known to the defendant had been publicly disseminated
10prior to that time and a reasonable time had elapsed for the market
P2 1to absorb the information and shall be liable to the issuer of the
2security or to a person who institutes an action under this section
3in the right of the issuer of the security for reasonable costs and
4attorney’s fees.
5(b) The amounts recoverable under this section by the issuer
6shall be reduced by any amount paid by the defendant in a
7proceeding brought by the Securities and Exchange Commission
8with respect to the same transaction or transactions under the
9federal Insider Trading Sanctions Act of 1984 (15 U.S.C. Secs.
1078a, 78c, 78o, 78t, 78u, and 78ff) or any otherbegin delete actend deletebegin insert act,end insert regardless
11of whether the amount was paid
pursuant to a judgment or
12settlement or paid before or after the filing of an action by the
13plaintiff against the defendant. If a proceeding has been
14commenced by the Securities and Exchangebegin delete Commissionend delete
15begin insert Commission,end insert but has not been finally resolved, the court shall delay
16entering a judgment for the plaintiff under this section until that
17proceeding is resolved.
18(c) If any shareholder of an issuer alleges to the board that there
19has been a violation of this section, the board shallbegin delete be required toend delete
20 consider the allegation in good faith, and if the allegation involves
21misconduct by any director, that director shall not be entitled to
22vote on any matter involving the allegation.
However, that director
23may be counted in determining the presence of a quorum at a
24meeting of the board or a committee of the board.
25(d) This section shall only apply to issuers who have total assets
26in excess of one million dollars ($1,000,000) and have a class of
27equity security held of record by 500 or more persons.
O
99