BILL NUMBER: SB 726	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 8, 2016
	AMENDED IN ASSEMBLY  MARCH 31, 2016
	AMENDED IN ASSEMBLY  SEPTEMBER 3, 2015

INTRODUCED BY   Senator Hueso
    (   Coauthor:   Senator   Hall
  ) 
    (   Coauthor:   Assembly Member  
Gipson   ) 

                        FEBRUARY 27, 2015

   An act to add Section 25401.2 to the Corporations Code, relating
to corporate securities.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 726, as amended, Hueso. Corporate securities: unlawful conduct.

   (1) The Corporate Securities Law of 1968 generally regulates the
offer and sale of corporate securities within the state, and
specifically makes specified conduct with regard to the offer and
sale of corporate securities unlawful. That law  requires the
Commissioner of Business Oversight to perform specific oversight
duties regarding the offer and sale of securities and  provides
that any willful violation of that law is a crime.
   This bill would make it unlawful for any person, directly or
indirectly, in this state to knowingly  or recklessly  make
an untrue statement of material fact or omit to state a material fact
necessary in order to make the statements made, in light of the
circumstances under which the statements are made, not misleading, to
any  Calif   ornia  state government official with
the intention of inducing an investigation of a publicly traded
company for the purpose of manipulating the value of a security of
that publicly traded company for financial gain.  The bill would
prohibit these provisions from being deemed to require the
commissioner to affirmatively track or investigate anonymous
complaints he or she receives, or to publicly disclose the substance
of a confidential investigation, relating to this unlawful practice.

   By expanding the scope of a crime, this bill would impose a
state-mandated local program.
   (2) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 25401.2 is added to the Corporations Code, to
read:
   25401.2.   (a)    It is unlawful for any person,
directly or indirectly, in this state to knowingly  or
recklessly  make an untrue statement of material fact or omit to
state a material fact necessary in order to make the statements
made, in light of the circumstances under which the statements are
made, not misleading, to any  California  state government
official with the intention of inducing an investigation of a
publicly traded company for the purpose of manipulating the value of
a security of that publicly traded company for financial gain. 
   (b) This section shall not be deemed to require the commissioner
to affirmatively track or investigate anonymous complaints he or she
receives, or to publicly disclose the substance of a confidential
investigation, relating to a violation of this section. 
  SEC. 2.   No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.