Corporations Code — Part 7 | CORP — United States — California law | Esheria

Corporations Code

Part 7 of 13 · provisions 1,201–1,400

This provision says the act is called the Corporations Code.

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Attorney General reporting Department of Justice information disclosure LLC compliance LLC formation filings LLC governance Membership interests Secretary of State Secretary of State filings Unincorporated associations acceptance location access to records accountability accounting accounting standards accredited investors accrued rights acknowledgment acquisition filings acquisition notice acquisition of control acquisition review adjourned meetings adjournment administration +2,294 more

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This section repeals the listed acts and sections, but it does not affect certain pre-1873 corporations that did not elect to continue under the Civil Code. This section repeals the acts and code sections listed in it. This section repeals the listed acts and code sections. This section repeals the listed acts and code sections. This section repeals Chapter 183 of the Statutes of 1941.

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Provisions of Corporations Code

Showing 200 of 2,411

  1. 25016.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 1. DEFINITIONS [25000 - 25023] ( Part 1 added by Stats. 1968, Ch. 88. )

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    This section defines “Rule” and “Order” for this part of the Corporations Code.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 1. DEFINITIONS [25000 - 25023] ( Part 1 added by Stats. 1968, Ch. 88. ) ## 25016. “Rule” means any published regulation or standard of general application issued by the commissioner. “Order” means a consent, authorization, approval, permit, or requirement applicable to a specific case issued by the commissioner. (Added by Stats. 1968, Ch. 88.)
  2. 25017.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 1. DEFINITIONS [25000 - 25023] ( Part 1 added by Stats. 1968, Ch. 88. )

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    This section defines “sale,” “offer,” and related securities terms, and lists transactions that are excluded from those definitions.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 1. DEFINITIONS [25000 - 25023] ( Part 1 added by Stats. 1968, Ch. 88. ) ## 25017. (a) “Sale” or “sell” includes every contract of sale of, contract to sell, or disposition of, a security or interest in a security for value. “Sale” or “sell” includes any exchange of securities and any change in the rights, preferences, privileges, or restrictions of or on outstanding securities. (b) “Offer” or “offer to sell” includes every attempt or offer to dispose of, or solicitation of an offer to buy, a security or interest in a security for value. (c) Any security given or delivered with, or as a bonus on account of, any purchase of securities or any other thing constitutes a part of the subject of the purchase and is considered to have been offered and sold for value. (d) A purported gift of assessable stock involves an offer and sale. (e) Every sale or offer of a warrant or right to purchase or subscribe to another security of the same or another issuer, as well as every sale or offer of a security which gives the holder a present or future right or privilege to convert the security into another security of the same or another issuer, includes an offer and sale of the other security only at the time of the offer or sale of the warrant or right or convertible security; but neither the exercise of the right to purchase or subscribe or to convert nor the issuance of securities pursuant thereto is an offer or sale. (f) The terms defined in this section do not include: (1) any bona fide secured transaction in or loan of outstanding securities; (2) any stock dividend payable with respect to common stock of a corporation solely (except for any cash or scrip paid for fractional shares) in shares of such common stock, if the corporation has no other class of voting stock outstanding; provided, that shares issued in any such dividend shall be subject to any conditions previously imposed by the commissioner applicable to the shares with respect to which they are issued; or (3) any act incident to a transaction or reorganization approved by a state or federal court in which securities are issued and exchanged for one or more outstanding securities, claims, or property interests, or partly in that exchange and partly for cash, and nothing in this division shall be construed to prohibit a court from applying the protections described in Section 25014.7 or 25140 and the regulations adopted thereunder when approving any transaction involving a rollup participant. (Amended by Stats. 1998, Ch. 48, Sec. 2. Effective January 1, 1999.)
  3. 25018.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 1. DEFINITIONS [25000 - 25023] ( Part 1 added by Stats. 1968, Ch. 88. )

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    This section defines four federal securities-law names as meaning the federal statutes with those names, as amended before or after the law’s effective date.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 1. DEFINITIONS [25000 - 25023] ( Part 1 added by Stats. 1968, Ch. 88. ) ## 25018. “Securities Act of 1933,” “Securities Exchange Act of 1934,” “Investment Advisers Act of 1940,” and “Investment Company Act of 1940” mean the federal statutes of those names as amended before or after the effective date of this law. (Amended by Stats. 2015, Ch. 190, Sec. 13. (AB 1517) Effective January 1, 2016.)
  4. 25019.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 1. DEFINITIONS [25000 - 25023] ( Part 1 added by Stats. 1968, Ch. 88. )

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    This section defines “security” broadly and lists items that count as securities, plus specific exclusions.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 1. DEFINITIONS [25000 - 25023] ( Part 1 added by Stats. 1968, Ch. 88. ) ## 25019. “Security” means any note; stock; treasury stock; membership in an incorporated or unincorporated association; bond; debenture; evidence of indebtedness; certificate of interest or participation in any profit-sharing agreement; collateral trust certificate; preorganization certificate or subscription; transferable share; investment contract; viatical settlement contract or a fractionalized or pooled interest therein; life settlement contract or a fractionalized or pooled interest therein; voting trust certificate; certificate of deposit for a security; interest in a limited liability company and any class or series of those interests (including any fractional or other interest in that interest), except a membership interest in a limited liability company in which the person claiming this exception can prove that all of the members are actively engaged in the management of the limited liability company; provided that evidence that members vote or have the right to vote, or the right to information concerning the business and affairs of the limited liability company, or the right to participate in management, shall not establish, without more, that all members are actively engaged in the management of the limited liability company; certificate of interest or participation in an oil, gas or mining title or lease or in payments out of production under that title or lease; put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof); or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency; any beneficial interest or other security issued in connection with a funded employees’ pension, profit sharing, stock bonus, or similar benefit plan; or, in general, any interest or instrument commonly known as a “security”; or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. All of the foregoing are securities whether or not evidenced by a written document. “Security” does not include: (1) any beneficial interest in any voluntary inter vivos trust which is not created for the purpose of carrying on any business or solely for the purpose of voting, or (2) any beneficial interest in any testamentary trust, or (3) any insurance or endowment policy or annuity contract under which an insurance company admitted in this state promises to pay a sum of money (whether or not based upon the investment performance of a segregated fund) either in a lump sum or periodically for life or some other specified period, or (4) any franchise subject to registration under the Franchise Investment Law (Division 5 (commencing with Section 31000)), or exempted from registration by Section 31100 or 31101. (Amended by Stats. 2000, Ch. 705, Sec. 2. Effective January 1, 2001.)
  5. 2502.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

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    This section says the division applies only to social purpose corporations covered by it, including certain existing, merged, amended, or converted entities, with stated exceptions.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2502. This division applies only to social purpose corporations organized expressly under this division whether organized or existing under this division or amended, merged or converted into a social purpose corporation in accordance with Chapter 9 (commencing with Section 900) of Division 1, Chapter 11 (commencing with Section 1100) of Division 1 or Chapter 11.5 (commencing with Section 1150) of Division 1, including all flexible purpose corporations formed under this division prior to January 1, 2015, and now existing except as provided in paragraph (2) of subdivision (b) of Section 2601 and paragraph (3) of subdivision (b) of Section 2602. (Amended by Stats. 2014, Ch. 694, Sec. 15. (SB 1301) Effective January 1, 2015.)
  6. 2502.01.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

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    Certain qualifying social purpose corporations are conclusively treated as agencies and instrumentalities of the United States and are entitled to related privileges and immunities.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2502.01. Every social purpose corporation organized under the laws of this state or similar foreign social purpose corporation, all of the capital stock of which is beneficially owned by the United States, an agency or instrumentality of the United States or any social purpose corporation or similar foreign social purpose corporation the whole of the capital stock of which is owned by the United States or by an agency or instrumentality of the United States, is conclusively presumed to be an agency and instrumentality of the United States and is entitled to all privileges and immunities to which the holders of all of its stock are entitled as agencies of the United States. (Amended by Stats. 2014, Ch. 694, Sec. 16. (SB 1301) Effective January 1, 2015.)
  7. 2502.02.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

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    References in this division to other state or federal statutes mean those statutes as amended over time, unless the text expressly says otherwise.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2502.02. Unless otherwise expressly provided, whenever reference is made in this division to any other state or federal statute, that reference is to that statute as it may be amended from time to time, whether before or after the enactment of this division. (Added by Stats. 2011, Ch. 740, Sec. 12. (SB 201) Effective January 1, 2012.)
  8. 2502.03.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

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    A social purpose corporation may be sued like a corporation under the Code of Civil Procedure.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2502.03. A social purpose corporation may be sued in the same manner as a corporation as provided in the Code of Civil Procedure. (Amended by Stats. 2014, Ch. 694, Sec. 17. (SB 1301) Effective January 1, 2015.)
  9. 2502.04.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

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    A social purpose corporation must, as a condition of its existence, be subject to civil procedure provisions allowing attachment of corporate property.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2502.04. A social purpose corporation formed under this division shall, in respect of its property, as a condition of its existence as a social purpose corporation, be subject, in the same manner as a corporation, to the provisions of the Code of Civil Procedure authorizing the attachment of corporate property. (Amended by Stats. 2014, Ch. 694, Sec. 18. (SB 1301) Effective January 1, 2015.)
  10. 2502.05.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

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    The Secretary of State’s filing fees for social purpose corporations must match the fees set for corporations under the cited Government Code article.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2502.05. The fees of the Secretary of State for filing instruments by or on behalf of social purpose corporations shall be the same fees prescribed for corporations in Article 3 (commencing with Section 12180) of Chapter 3 of Part 2 of Division 3 of Title 2 of the Government Code. (Amended by Stats. 2014, Ch. 694, Sec. 19. (SB 1301) Effective January 1, 2015.)
  11. 2502.06.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

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    A social purpose corporation filing certain instruments must keep a copy of the referenced agreement or document and its amendments at its principal office, and must give copies to shareholders on written request without charge.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2502.06. (a) Provisions of the articles described in paragraph (3) of subdivision (e) of Section 2602 and subdivisions (a) and (b) of Section 2603 may be made dependent upon facts ascertainable outside of the articles, if the manner in which those facts shall operate upon those provisions is clearly and expressly set forth in the articles. Similarly, any of the terms of an agreement of merger pursuant to Section 1101 may be made dependent upon facts ascertainable outside of that agreement, if the manner in which those facts shall operate upon the terms of the agreement is clearly and expressly set forth in the agreement of merger. (b) Notwithstanding subdivision (a), when any provisions or terms of articles or an agreement of merger are made dependent upon facts ascertainable outside of the filed instrument through a reference to an agreement or similar document, the social purpose corporation filing that instrument shall maintain at its principal office a copy of that referenced agreement or document and all amendments, and shall provide to its shareholders, in the case of articles, or to shareholders of any constituent corporation or other business entity, in the case of an agreement of merger, a copy of them upon written request and without charge. (c) For the purposes of this section, “referenced agreement” means an agreement or contract to which the social purpose corporation is a party. An amendment or revision of a referenced agreement shall require shareholder approval, in addition to any other required approvals, upon any of the following circumstances: (1) If the amendment or revision of the referenced agreement would result in a material change in the rights, preferences, privileges, or restrictions of a class or series of shares, the amendment or revision shall be approved by the outstanding shares, as defined in Section 152, of that class or series. (2) If the amendment or revision of the referenced agreement would result in a material change in the rights or liabilities of any class or series of shares with respect to the subject matter of paragraph (1), (2), (3), (5), or (9) of subdivision (a) of Section 2603, the amendment or revision shall be approved by the outstanding shares, as defined in Section 152, of that class or series. (3) If the amendment or revision of the referenced agreement would result in a material change in the restrictions on transfer or hypothecation of any class or series of shares, the amendment or revision shall be approved by the outstanding shares, as defined in Section 152, of that class or series. (4) If the amendment or revision of the referenced agreement would result in a change of any of the principal terms of an agreement of merger, the amendment or revision shall be approved in the same manner as required by Section 3504 for a change in the principal terms of an agreement of merger. (Amended by Stats. 2022, Ch. 617, Sec. 40. (SB 1202) Effective January 1, 2023.)
  12. 2502.07.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

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    This section says the division does not change subdivision (h) of Section 25102 or the conditions for getting an exemption under that subdivision.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2502.07. Nothing contained in this division shall be construed to modify the provisions of subdivision (h) of Section 25102, or the conditions provided therein to the availability of an exemption under that subdivision. (Added by Stats. 2011, Ch. 740, Sec. 12. (SB 201) Effective January 1, 2012.)
  13. 25020.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 1. DEFINITIONS [25000 - 25023] ( Part 1 added by Stats. 1968, Ch. 88. )

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    This section defines “State” for this part of the Corporations Code.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 1. DEFINITIONS [25000 - 25023] ( Part 1 added by Stats. 1968, Ch. 88. ) ## 25020. “State” means any state, territory, or possession of the United States, the District of Columbia and Puerto Rico. (Added by Stats. 1968, Ch. 88.)
  14. 25021.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 1. DEFINITIONS [25000 - 25023] ( Part 1 added by Stats. 1968, Ch. 88. )

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    This section says the terms “subdivided lands” and “subdivision” have the meanings given in other cited Business and Professions Code sections.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 1. DEFINITIONS [25000 - 25023] ( Part 1 added by Stats. 1968, Ch. 88. ) ## 25021. “Subdivided lands” and “subdivision” have the meanings prescribed in Sections 11000, 11004.5, and 11218 of the Business and Professions Code. (Amended by Stats. 2004, Ch. 697, Sec. 17. Effective January 1, 2005.)
  15. 25022.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 1. DEFINITIONS [25000 - 25023] ( Part 1 added by Stats. 1968, Ch. 88. )

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    This section defines “underwriter” for securities distributions.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 1. DEFINITIONS [25000 - 25023] ( Part 1 added by Stats. 1968, Ch. 88. ) ## 25022. “Underwriter” means a person who has agreed with an issuer or other person on whose behalf a distribution is to be made (a) to purchase securities for distribution or (b) to distribute securities for or on behalf of such issuer or other person or (c) to manage or supervise a distribution of securities for or on behalf of such issuer or other person. (Added by Stats. 1968, Ch. 88.)
  16. 25023.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 1. DEFINITIONS [25000 - 25023] ( Part 1 added by Stats. 1968, Ch. 88. )

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    This section defines viatical settlement contracts and life settlement contracts, and lists several transactions that are excluded from those definitions.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 1. DEFINITIONS [25000 - 25023] ( Part 1 added by Stats. 1968, Ch. 88. ) ## 25023. (a) Except as provided in subdivision (b), “viatical settlement contract” means an agreement entered into between a person owning a life insurance policy upon the life of a person with a catastrophic or life-threatening illness or condition and another person by which the policy owner receives compensation or anything of value less than the death benefits of the insurance policy in return for an assignment, transfer, sale, devise, or bequest of the death benefits or ownership of the insurance policy, and “life settlement contract” means an agreement, other than a viatical settlement contract, for the purchase, sale, assignment, transfer, devise, or bequest of any portion of the death benefit or ownership of a life insurance policy or certificate for consideration that is less than the expected death benefit of the life insurance policy or certificate. (b) “Viatical settlement contract” and “life settlement contract” do not include any of the following: (1) The assignment, transfer, sale, devise, or bequest of a death benefit, life insurance policy, or certificate of insurance by the insured or the original owner to any person if the assignment, transfer, sale, devise, or bequest (A) is not accompanied by the publication of any advertisement and (B) is not effected by or through a broker-dealer (Section 25004). (2) The assignment of a life insurance policy to a bank, savings bank, savings association, credit union, or other lender (either licensed or not required to be licensed) as collateral for a loan, or to a stop-loss insurer or reinsurer. (3) The exercise of accelerated benefits pursuant to the terms of a life insurance policy issued in accordance with the insurance laws of this state. (4) The assignment, transfer, sale, devise, or bequest of any undivided death benefit, life insurance policy, or certificate of insurance by an entity licensed pursuant to Section 10113.2 of the Insurance Code, or a viatical or life settlement provider licensed from another state, to one individual or entity, provided that the individual or entity represents that the individual or entity is purchasing for its own account (or trust account, if the entity is a trustee) and not with a view to or for sale in connection with a distribution of the individual death benefit, life insurance policy, or certificate of insurance. (Amended by Stats. 2019, Ch. 143, Sec. 43. (SB 251) Effective January 1, 2020.)
  17. 2503.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

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    “Annual report” means the report required under Section 3500, including the information listed there.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2503. “Annual report” means the report required by subdivision (a) of Section 3500, including the information specified in subdivision (b) of Section 3500. (Added by Stats. 2011, Ch. 740, Sec. 12. (SB 201) Effective January 1, 2012.)
  18. 2503.1.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

    Verify source ↗

    A “close social purpose corporation” is a social purpose corporation that is also a close corporation.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2503.1. “Close social purpose corporation” means a social purpose corporation that is also a close corporation. (Amended by Stats. 2014, Ch. 694, Sec. 21. (SB 1301) Effective January 1, 2015.)
  19. 2504.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

    Verify source ↗

    This section defines “constituent social purpose corporation.”

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2504. “Constituent social purpose corporation” means a social purpose corporation that is merged with or into one or more corporations or one or more other business entities and includes a surviving social purpose corporation. (Amended by Stats. 2014, Ch. 694, Sec. 22. (SB 1301) Effective January 1, 2015.)
  20. 2505.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

    Verify source ↗

    This section defines “conversion” as a conversion under specified chapters of Division 1 and this division.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2505. “Conversion” means a conversion pursuant to Chapter 11.5 (commencing with Section 1150) of Division 1 and Chapter 9 (commencing with Section 3300) of this division. (Added by Stats. 2011, Ch. 740, Sec. 12. (SB 201) Effective January 1, 2012.)
  21. 2506.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

    Verify source ↗

    This section defines “disappearing social purpose corporation” as a constituent social purpose corporation that is not the surviving entity.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2506. “Disappearing social purpose corporation” means a constituent social purpose corporation that is not the surviving entity. (Amended by Stats. 2014, Ch. 694, Sec. 23. (SB 1301) Effective January 1, 2015.)
  22. 2507.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

    Verify source ↗

    “Domestic social purpose corporation” means a corporation organized under this division.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2507. “Domestic social purpose corporation” means a corporation organized under this division. (Amended by Stats. 2014, Ch. 694, Sec. 24. (SB 1301) Effective January 1, 2015.)
  23. 2509.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

    Verify source ↗

    “Social purpose corporation” means only a corporation organized under this division, unless the section says otherwise.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2509. “Social purpose corporation,” unless otherwise expressly provided, refers only to a corporation organized under this division. (Amended by Stats. 2014, Ch. 694, Sec. 25. (SB 1301) Effective January 1, 2015.)
  24. 2510.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

    Verify source ↗

    This section defines when a social purpose corporation is treated as subject to the Banking Law.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2510. “Social purpose corporation subject to the Banking Law” means any of the following: (a) A social purpose corporation that, with the approval of the Commissioner of Financial Protection and Innovation, is incorporated for the purpose of engaging in, or that is authorized by the Commissioner of Financial Protection and Innovation to engage in, the commercial banking business under the Banking Law (Division 1.1 (commencing with Section 1000) of the Financial Code). (b) Any social purpose corporation that, with the approval of the Commissioner of Financial Protection and Innovation, is incorporated for the purpose of engaging in, or that is authorized by the Commissioner of Financial Protection and Innovation to engage in, the industrial banking business under the Banking Law (Division 1.1 (commencing with Section 1000) of the Financial Code). (c) Any social purpose corporation, other than a social purpose corporation described in subdivision (d), that, with the approval of the Commissioner of Financial Protection and Innovation, is incorporated for the purpose of engaging in, or that is authorized by the Commissioner of Financial Protection and Innovation to engage in, the trust business under the Banking Law (Division 1.1 (commencing with Section 1000) of the Financial Code). (d) Any social purpose corporation that is authorized by the Commissioner of Financial Protection and Innovation and the Commissioner of Insurance to maintain a title insurance department to engage in title insurance business and a trust department to engage in trust business. (e) Any social purpose corporation that, with the approval of the Commissioner of Financial Protection and Innovation, is incorporated for the purpose of engaging in, or that is authorized by the Commissioner of Financial Protection and Innovation to engage in, business under Article 1 (commencing with Section 1850) of Chapter 21 of Division 1.1 of the Financial Code. (Amended by Stats. 2022, Ch. 452, Sec. 50. (SB 1498) Effective January 1, 2023.)
  25. 2510.1.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

    Verify source ↗

    This section defines a “Social purpose corporation subject to the Insurance Code as an insurer.”

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2510.1. “Social purpose corporation subject to the Insurance Code as an insurer” means a social purpose corporation that has met the requirements of Sections 201.5, 201.6, and 201.7. (Amended by Stats. 2014, Ch. 694, Sec. 27. (SB 1301) Effective January 1, 2015.)
  26. 25100.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. )

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    This section exempts listed securities from certain qualification sections and gives the commissioner power to grant or withdraw exchange certification and certain exemptions.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. ) ## 25100. The following securities are exempted from Sections 25110, 25120, and 25130: (a) Any security (including a revenue obligation) issued or guaranteed by the United States, any state, any city, county, city and county, public district, public authority, public corporation, public entity, or political subdivision of a state or any agency or corporate or other instrumentality of any one or more of the foregoing; or any certificate of deposit for any of the foregoing. (b) Any security issued or guaranteed by Canada, any Canadian province, any political subdivision or municipality of that province, or by any other foreign government with which the United States currently maintains diplomatic relations, if the security is recognized as a valid obligation by the issuer or guarantor; or any certificate of deposit for any of the foregoing. (c) Any security issued or guaranteed by and representing an interest in or a direct obligation of a national bank or a bank or trust company incorporated under the laws of this state, and any security issued by a bank to one or more other banks and representing an interest in an asset of the issuing bank. (d) Any security issued or guaranteed by a federal savings association or federal savings bank or federal land bank or joint land bank or national farm loan association or by any savings association, as defined in subdivision (a) of Section 5102 of the Financial Code, which is subject to the supervision and regulation of the Commissioner of Financial Protection and Innovation of this state. (e) Any security (other than an interest in all or portions of a parcel or parcels of real property which are subdivided land or a subdivision or in a real estate development), the issuance of which is subject to authorization by the Insurance Commissioner, the Public Utilities Commission, or the Real Estate Commissioner of this state. (f) Any security consisting of any interest in all or portions of a parcel or parcels of real property that are subdivided lands or a subdivision or in a real estate development; provided that the exemption in this subdivision shall not be applicable to: (1) any investment contract sold or offered for sale with, or as part of, that interest, or (2) any person engaged in the business of selling, distributing, or supplying water for irrigation purposes or domestic use that is not a public utility except that the exemption is applicable to any security of a mutual water company (other than an investment contract as described in paragraph (1)) offered or sold in connection with subdivided lands pursuant to Chapter 2 (commencing with Section 14310) of Part 7 of Division 3 of Title 1. (g) Any mutual capital certificates or savings accounts, as defined in the Savings Association Law, issued by a savings association, as defined by subdivision (a) of Section 5102 of the Financial Code, and holding a license or certificate of authority then in force from the Commissioner of Financial Protection and Innovation of this state. (h) Any security issued or guaranteed by any federal credit union, or by any credit union organized and supervised, or regulated, under the Credit Union Law. (i) Any security issued or guaranteed by any railroad, other common carrier, public utility, or public utility holding company which is regulated in respect of the issuance or guarantee of the security by a governmental authority of the United States, of any state, of Canada or of any Canadian province; and the security is subject to registration with or authorization of issuance by that authority. (j) Any security (except evidences of indebtedness, whether interest bearing or not) of an issuer (1) organized exclusively for educational, benevolent, fraternal, religious, charitable, social, or reformatory purposes and not for pecuniary profit, if no part of the net earnings of the issuer inures to the benefit of any private shareholder or individual, or (2) organized as a chamber of commerce or trade or professional association. The fact that amounts received from memberships or dues or both will or may be used to construct or otherwise acquire facilities for use by members of the nonprofit organization does not disqualify the organization for this exemption. This exemption does not apply to the securities of any nonprofit organization if any promoter thereof expects or intends to make a profit directly or indirectly from any business or activity associated with the organization or operation of that nonprofit organization or from remuneration received from that nonprofit organization. (k) Any agreement, commonly known as a “life income contract,” of an issuer (1) organized exclusively for educational, benevolent, fraternal, religious, charitable, social, or reformatory purposes and not for pecuniary profit and (2) which the commissioner designates by rule or order, with a donor in consideration of a donation of property to that issuer and providing for the payment to the donor or persons designated by the donor of income or specified periodic payments from the donated property or other property for the life of the donor or those other persons. (l) Any note, draft, bill of exchange, or banker’s acceptance which is freely transferable and of prime quality, arises out of a current transaction or the proceeds of which have been or are to be used for current transactions, and which evidences an obligation to pay cash within nine months of the date of issuance, exclusive of days of grace, or any renewal of that paper which is likewise limited, or any guarantee of that paper or of that renewal, provided that the paper is not offered to the public in amounts of less than twenty-five thousand dollars ($25,000) in the aggregate to any one purchaser. In addition, the commissioner may, by rule or order, exempt any issuer of any notes, drafts, bills of exchange, or banker’s acceptances from qualification of those securities when the commissioner finds that the qualification is not necessary or appropriate in the public interest or for the protection of investors. (m) Any security issued by any corporation organized and existing under the provisions of Chapter 1 (commencing with Section 54001) of Division 20 of the Food and Agricultural Code. (n) Any beneficial interest in an employees’ pension, profit-sharing, stock bonus, or similar benefit plan which meets the requirements for qualification under Section 401 of the federal Internal Revenue Code or any statute amendatory thereof or supplementary thereto. A determination letter from the Internal Revenue Service stating that an employees’ pension, profit-sharing, stock bonus, or similar benefit plan meets those requirements shall be conclusive evidence that the plan is an employees’ pension, profit-sharing, stock bonus, or similar benefit plan within the meaning of the first sentence of this subdivision until the date the determination letter is revoked in writing by the Internal Revenue Service, regardless of whether or not the revocation is retroactive. (o) Any security listed or approved for listing upon notice of issuance on a national securities exchange, if the exchange has been certified by rule or order of the commissioner and any warrant or right to purchase or subscribe to the security. The exemption afforded by this subdivision does not apply to securities listed or approved for listing upon notice of issuance on a national securities exchange, in a rollup transaction unless the rollup transaction is an eligible rollup transaction as defined in Section 25014.7. That certification of any exchange shall be made by the commissioner upon the written request of the exchange if the commissioner finds that the exchange, in acting on applications for listing of common stock, substantially applies the minimum standards set forth in either subparagraph (A) or (B) of paragraph (1), and, in considering suspension or removal from listing, substantially applies each of the criteria set forth in paragraph (2). (1) Listing standards: (A) (i) Shareholders’ equity of at least four million dollars ($4,000,000). (ii) Pretax income of at least seven hundred fifty thousand dollars ($750,000) in the issuer’s last fiscal year or in two of its last three fiscal years. (iii) Minimum public distribution of 500,000 shares (exclusive of the holdings of officers, directors, controlling shareholders, and other concentrated or family holdings), together with a minimum of 800 public holders or minimum public distribution of 1,000,000 shares together with a minimum of 400 public holders. The exchange may also consider the listing of a company’s securities if the company has a minimum of 500,000 shares publicly held, a minimum of 400 shareholders and daily trading volume in the issue has been approximately 2,000 shares or more for the six months preceding the date of application. In evaluating the suitability of an issue for listing under this trading provision, the exchange shall review the nature and frequency of that activity and any other factors as it may determine to be relevant in ascertaining whether the issue is suitable for trading. A security that trades infrequently shall not be considered for listing under this paragraph even though average daily volume amounts to 2,000 shares per day or more. Companies whose securities are concentrated in a limited geographical area, or whose securities are largely held in block by institutional investors, normally may not be considered eligible for listing unless the public distribution appreciably exceeds 500,000 shares. (iv) Minimum price of three dollars ($3) per share for a reasonable period of time prior to the filing of a listing application; provided, however, in certain instances an exchange may favorably consider listing an issue selling for less than three dollars ($3) per share after considering all pertinent factors, including market conditions in general, whether historically the issue has sold above three dollars ($3) per share, the applicant’s capitalization, and the number of outstanding and publicly held shares of the issue. (v) An aggregate market value for publicly held shares of at least three million dollars ($3,000,000). (B) (i) Shareholders’ equity of at least four million dollars ($4,000,000). (ii) Minimum public distribution set forth in clause (iii) of subparagraph (A) of paragraph (1). (iii) Operating history of at least three years. (iv) An aggregate market value for publicly held shares of at least fifteen million dollars ($15,000,000). (2) Criteria for consideration of suspension or removal from listing: (A) If a company that (i) has shareholders’ equity of less than one million dollars ($1,000,000) has sustained net losses in each of its two most recent fiscal years, or (ii) has net tangible assets of less than three million dollars ($3,000,000) and has sustained net losses in three of its four most recent fiscal years. (B) If the number of shares publicly held (excluding the holdings of officers, directors, controlling shareholders, and other concentrated or family holdings) is less than 150,000. (C) If the total number of shareholders is less than 400 or if the number of shareholders of lots of 100 shares or more is less than 300. (D) If the aggregate market value of shares publicly held is less than seven hundred fifty thousand dollars ($750,000). (E) If shares of common stock sell at a price of less than three dollars ($3) per share for a substantial period of time and the issuer shall fail to effectuate a reverse stock split of the shares within a reasonable period of time after being requested by the exchange to take that action. A national securities exchange, certified by rule or order of the commissioner under this subdivision, shall file annual reports when requested to do so by the commissioner. The annual reports shall contain, by issuer: the variances granted to an exchange’s listing standards, including variances from corporate governance and voting rights’ standards, for any security of that issuer; the reasons for the variances; a discussion of the review procedure instituted by the exchange to determine the effect of the variances on investors and whether the variances should be continued; and any other information that the commissioner deems relevant. The purpose of these reports is to assist the commissioner in determining whether the quantitative and qualitative requirements of this subdivision are substantially being met by the exchange in general or with regard to any particular security. The commissioner after appropriate notice and opportunity for hearing in accordance with the provisions of the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code) may, in the commissioner’s discretion, by rule or order, decertify any exchange previously certified that ceases substantially to apply the minimum standards or criteria as set forth in paragraphs (1) and (2). A rule or order of certification shall conclusively establish that any security listed or approved for listing upon notice of issuance on any exchange named in a rule or order of certification, and any warrant or right to purchase or subscribe to that security, is exempt under this subdivision until the adoption by the commissioner of any rule or order decertifying the exchange. (p) A promissory note secured by a lien on real property, which is neither one of a series of notes of equal priority secured by interests in the same real property nor a note in which beneficial interests are sold to more than one person or entity. (q) Any unincorporated interindemnity or reciprocal or interinsurance contract, that qualifies under the provisions of Section 1280.7 of the Insurance Code, between members of a cooperative corporation, organized and operating under Part 2 (commencing with Section 12200) of Division 3 of Title 1, and whose members consist only of physicians and surgeons licensed in California, which contracts indemnify solely in respect to medical malpractice claims against the members, and which do not collect in advance of loss any moneys other than contributions by each member to a collective reserve trust fund or for necessary expenses of administration. (1) Whenever it appears to the commissioner that any person has engaged or is about to engage in any act or practice constituting a violation of any provision of Section 1280.7 of the Insurance Code, the commissioner may, in the commissioner’s discretion, bring an action in the name of the people of the State of California in the superior court to enjoin the acts or practices or to enforce compliance with Section 1280.7 of the Insurance Code. Upon a proper showing a permanent or preliminary injunction, a restraining order, or a writ of mandate shall be granted and a receiver or conservator may be appointed for the defendant or the defendant’s assets. (2) The commissioner may, in the commissioner’s discretion, (A) make public or private investigations within or outside of this state as the commissioner deems necessary to determine whether any person has violated or is about to violate any provision of Section 1280.7 of the Insurance Code or to aid in the enforcement of Section 1280.7, and (B) publish information concerning the violation of Section 1280.7. (3) For the purpose of any investigation or proceeding under this section, the commissioner or any officer designated by the commissioner may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records which the commissioner deems relevant or material to the inquiry. (4) In case of contumacy by, or refusal to obey a subpoena issued to, any person, the superior court, upon application by the commissioner, may issue to the person an order requiring the person to appear before the commissioner, or the officer designated by the commissioner, to produce documentary evidence, if so ordered, or to give evidence touching the matter under investigation or in question. Failure to obey the order of the court may be punished by the court as contempt. (5) No person is excused from attending or testifying or from producing any document or record before the commissioner or in obedience to the subpoena of the commissioner or any officer designated by the commissioner, or in any proceeding instituted by the commissioner, on the ground that the testimony or evidence (documentary or otherwise), required of the person may tend to incriminate the person or subject the person to a penalty or forfeiture, but no individual may be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which the person is compelled, after validly claiming the privilege against self-incrimination, to testify or produce evidence (documentary or otherwise), except that the individual testifying is not exempt from prosecution and punishment for perjury or contempt committed in testifying. (6) The cost of any review, examination, audit, or investigation made by the commissioner under Section 1280.7 of the Insurance Code shall be paid to the commissioner by the person subject to the review, examination, audit, or investigation, and the commissioner may maintain an action for the recovery of these costs in any court of competent jurisdiction. In determining the cost, the commissioner may use the actual amount of the salary or other compensation paid to the persons making the review, examination, audit, or investigation plus the actual amount of expenses including overhead reasonably incurred in the performance of the work. The recoverable cost of each review, examination, audit, or investigation made by the commissioner under Section 1280.7 of the Insurance Code shall not exceed twenty-five thousand dollars ($25,000), except that costs exceeding twenty-five thousand dollars ($25,000) shall be recoverable if the costs are necessary to prevent a violation of any provision of Section 1280.7 of the Insurance Code. (r) (1) Any shares, memberships, or credits to a member’s capital issued to a shareholder or member by any corporation organized and existing pursuant to the provisions of Part 2 (commencing with Section 12200) of Division 3 of Title 1, provided the aggregate investment in the corporation of that shareholder or member in shares, memberships, or credits to that member’s capital sold pursuant to this subdivision does not exceed one thousand dollars ($1,000). (2) The one-thousand-dollar ($1,000) limitation in paragraph (1) does not apply to any shares, memberships, or credits to that member’s capital as all, or part of, any patronage distributions, as defined in Section 12244. (3) The exemption in paragraph (1) does not apply to any of the following: (A) The shares, memberships, or capital credits of that corporation if any promoter thereof expects or intends to make a profit directly or indirectly from any business or activity associated with the corporation or the operation of the corporation or from remuneration, other than reasonable salary, received from the corporation. (B) The nonvoting shares, memberships, or capital credits of that corporation issued to any person who does not possess, and who will not acquire in connection with the issuance of nonvoting shares, memberships, or capital credits, “voting power” in the corporation as defined in Section 12253. (C) Shares, memberships, or capital credits issued by a nonprofit cooperative corporation organized to facilitate the creation of an unincorporated interindemnity arrangement that provides indemnification for medical malpractice to its physician and surgeon members, as set forth in subdivision (q). (s) Any security consisting of or representing an interest in a pool of mortgage loans that meets each of the following requirements: (1) The pool consists of whole mortgage loans or participation interests in those loans, which loans were originated or acquired in the ordinary course of business by a national bank or federal savings association or federal savings bank having its principal office in this state, by a bank incorporated under the laws of this state, or by a savings association as defined in subdivision (a) of Section 5102 of the Financial Code and which is subject to the supervision and regulation of the Commissioner of Financial Protection and Innovation, and each of which at the time of transfer to the pool is an authorized investment for the originating or acquiring institution. (2) The pool of mortgage loans is held in trust by a trustee which is a financial institution specified in paragraph (1) as trustee or otherwise. (3) The loans are serviced by a financial institution specified in paragraph (1). (4) The security is not offered in amounts of less than twenty-five thousand dollars ($25,000) in the aggregate to any one purchaser. (5) The security is offered pursuant to a registration under the Securities Act of 1933 (Public Law 112-106), as amended, or pursuant to an exemption under Regulation A under that act, or in the opinion of counsel for the issuer, is offered pursuant to an exemption under Section 4(a)(2) of that act. (t) (1) Any security issued or guaranteed by and representing an interest in or a direct obligation of an industrial bank incorporated under the laws of the state and authorized by the Commissioner of Financial Protection and Innovation to engage in industrial banking business. (2) Any investment certificate in or issued by any industrial bank that is organized under the laws of a state of the United States other than this state, that is insured by the Federal Deposit Insurance Corporation, and that maintains a branch office in this state. (Amended by Stats. 2021, Ch. 512, Sec. 1. (AB 283) Effective January 1, 2022.)
  27. 25100.1.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. )

    Verify source ↗

    Some securities are exempt from certain qualification sections, but certain filings and fees are still required for covered investment-company securities.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. ) ## 25100.1. The following securities are not subject to Sections 25110, 25120, and 25130: (a) A security defined as a “covered security” pursuant to Section 18(b)(1) of the Securities Act of 1933 (15 U.S.C. Sec. 77r). (b) A security issued by an investment company that is registered or that has filed a registration statement under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1) and that is defined as a “covered security” pursuant to Section 18(b)(2) of the Securities Act of 1933, and all the following requirements are met: (1) Prior to any offer or sale in this state, there is filed with or paid to the commissioner each of the following: (A) A notice consisting of all documents that are part of a federal registration statement filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933 or, in lieu thereof, a form prescribed by the commissioner, and that a consent to service of process is either on file with the commissioner or is attached to the notice. (B) As necessary to compute fees, a report of the value of securities covered under this subdivision that are offered or sold in this state. (C) The notice filing fee provided for in subdivision (a) of Section 25608.1. (2) If any offer or sale is to be made pursuant to Section 18(b)(2) of the Securities Act of 1933 and this subdivision more than 12 months after the date the notice was filed under this subdivision, the issuer shall file another notice and pay the fee specified in subparagraph (C) of paragraph (1). (Amended by Stats. 2006, Ch. 538, Sec. 83. Effective January 1, 2007.)
  28. 25101.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. )

    Verify source ↗

    Some securities are exempt from Section 25130 if they are issued by a person whose listed security is on a national securities exchange certified by the commissioner.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. ) ## 25101. The following securities are exempt from the provisions of Section 25130: (a) Any security issued by a person that is the issuer of any security listed on a national securities exchange, if the exchange is certified by rule or order of the commissioner. (b) The exemption provided by subdivision (a) does not apply to securities offered pursuant to a registration under the Securities Act of 1933 or pursuant to the exemption afforded by Regulation A under that act if the aggregate offering price of the securities offered pursuant to that exemption exceeds fifty thousand dollars ($50,000). (Amended by Stats. 2009, Ch. 131, Sec. 10. (AB 991) Effective January 1, 2010.)
  29. 25101.1.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. )

    Verify source ↗

    Certain securities are exempt from qualification requirements, but foreign-issuer securities that use a federal registration exemption remain subject to qualification unless the issuer is a reporting company that files required SEC reports.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. ) ## 25101.1. The following securities are not subject to Sections 25110, 25120, and 25130: (a) A security that is offered or sold in a transaction that is exempt from registration under Section 4(a)(1) or 4(a)(3) of the Securities Act of 1933 (15 U.S.C. 77r et seq.) pursuant to Section 18(b)(4)(A) of that act, if the issuer, other than a foreign (other country) issuer described in subdivision (b), of the security files the required reports with the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). (b) A security of a foreign (other country) issuer that avails itself of the exemption from registration under Section 12(g)(3) of the Securities Exchange Act of 1934 is subject to the qualification requirements of Sections 25110, 25120, and 25130, unless the issuer is a reporting company under the Securities Exchange Act of 1934 and files the required reports under Section 13 or 15(d) of that act. (Amended by Stats. 2017, Ch. 516, Sec. 5. (SB 363) Effective January 1, 2018.)
  30. 25102.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. )

    Verify source ↗

    This section exempts listed securities transactions from Section 25110, but many exemptions depend on conditions like purchaser limits, disclosure, notices, and no public advertising.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. ) ## 25102. The following transactions are exempted from the provisions of Section 25110: (a) Any offer (but not a sale) not involving any public offering and the execution and delivery of any agreement for the sale of securities pursuant to the offer if (1) the agreement contains substantially the following provision: “The sale of the securities that are the subject of this agreement has not been qualified with the Commissioner of Financial Protection and Innovation and the issuance of the securities or the payment or receipt of any part of the consideration therefor prior to the qualification is unlawful, unless the sale of securities is exempt from the qualification by Section 25100, 25102, or 25105 of the California Corporations Code. The rights of all parties to this agreement are expressly conditioned upon the qualification being obtained, unless the sale is so exempt;” and (2) no part of the purchase price is paid or received and none of the securities are issued until the sale of the securities is qualified under this law unless the sale of securities is exempt from the qualification by this section or Section 25100 or 25105. (b) Any offer (but not a sale) of a security for which a registration statement has been filed under the Securities Act of 1933, as amended, but has not yet become effective, or for which an offering statement under Regulation A has been filed but has not yet been qualified, if no stop order or refusal order is in effect and no public proceeding or examination looking towards an order is pending under Section 8 of the act and no order under Section 25140 or subdivision (a) of Section 25143 is in effect under this law. (c) Any offer (but not a sale) and the execution and delivery of any agreement for the sale of securities pursuant to the offer as may be permitted by the commissioner upon application. Any negotiating permit under this subdivision shall be conditioned to the effect that none of the securities may be issued and none of the consideration therefor may be received or accepted until the sale of the securities is qualified under this law. (d) Any transaction or agreement between the issuer and an underwriter or among underwriters if the sale of the securities is qualified, or exempt from qualification, at the time of distribution thereof in this state, if any. (e) Any offer or sale of any evidence of indebtedness, whether secured or unsecured, and any guarantee thereof, in a transaction not involving any public offering. (f) Any offer or sale of any security in a transaction (other than an offer or sale to a pension or profit-sharing trust of the issuer) that meets each of the following criteria: (1) Sales of the security are not made to more than 35 persons, including persons not in this state. (2) All purchasers either have a preexisting personal or business relationship with the offeror or any of its partners, officers, directors or controlling persons, or managers (as appointed or elected by the members) if the offeror is a limited liability company, or by reason of their business or financial experience or the business or financial experience of their professional advisers who are unaffiliated with and who are not compensated by the issuer or any affiliate or selling agent of the issuer, directly or indirectly, could be reasonably assumed to have the capacity to protect their own interests in connection with the transaction. (3) Each purchaser represents that the purchaser is purchasing for the purchaser’s own account (or a trust account if the purchaser is a trustee) and not with a view to or for sale in connection with any distribution of the security. (4) The offer and sale of the security is not accomplished by the publication of any advertisement. The number of purchasers referred to above is exclusive of any described in subdivision (i), any officer, director, or affiliate of the issuer, or manager (as appointed or elected by the members) if the issuer is a limited liability company, and any other purchaser who the commissioner designates by rule. For purposes of this section, spouses (together with any custodian or trustee acting for the account of their minor children) are counted as one person and a partnership, corporation, or other organization that was not specifically formed for the purpose of purchasing the security offered in reliance upon this exemption, is counted as one person. The commissioner shall by rule require the issuer to file a notice of transactions under this subdivision. The failure to file the notice or the failure to file the notice within the time specified by the rule of the commissioner shall not affect the availability of the exemption. Any issuer that fails to file the notice as provided by rule of the commissioner shall, within 15 business days after discovery of the failure to file the notice or after demand by the commissioner, whichever occurs first, file the notice and pay to the commissioner a fee equal to the fee payable had the transaction been qualified under Section 25110. Neither the filing of the notice nor the failure by the commissioner to comment thereon precludes the commissioner from taking any action that the commissioner deems necessary or appropriate under this division with respect to the offer and sale of the securities. (g) Any offer or sale of conditional sale agreements, equipment trust certificates, or certificates of interest or participation therein or partial assignments thereof, covering the purchase of railroad rolling stock or equipment or the purchase of motor vehicles, aircraft, or parts thereof, in a transaction not involving any public offering. (h) Any offer or sale of voting common stock by a corporation incorporated in any state if, immediately after the proposed sale and issuance, there will be only one class of stock of the corporation outstanding that is owned beneficially by no more than 35 persons, provided all of the following requirements have been met: (1) The offer and sale of the stock is not accompanied by the publication of any advertisement, and no selling expenses have been given, paid, or incurred in connection therewith. (2) The consideration to be received by the issuer for the stock to be issued consists of any of the following: (A) Only assets (which may include cash) of an existing business enterprise transferred to the issuer upon its initial organization, of which all of the persons who are to receive the stock to be issued pursuant to this exemption were owners during, and the enterprise was operated for, a period of not less than one year immediately preceding the proposed issuance, and the ownership of the enterprise immediately prior to the proposed issuance was in the same proportions as the shares of stock are to be issued. (B) Only cash or cancellation of indebtedness for money borrowed, or both, upon the initial organization of the issuer, provided all of the stock is issued for the same price per share. (C) Only cash, provided the sale is approved in writing by each of the existing shareholders and the purchaser or purchasers are existing shareholders. (D) In a case where after the proposed issuance there will be only one owner of the stock of the issuer, only any legal consideration. (3) No promotional consideration has been given, paid, or incurred in connection with the issuance. Promotional consideration means any consideration paid directly or indirectly to a person who, acting alone or in conjunction with one or more other persons, takes the initiative in founding and organizing the business or enterprise of an issuer for services rendered in connection with the founding or organizing. (4) A notice in a form prescribed by rule of the commissioner, signed by an active member of the State Bar of California, is filed with or mailed for filing to the commissioner not later than 10 business days after receipt of consideration for the securities by the issuer. That notice shall contain an opinion of the member of the State Bar of California that the exemption provided by this subdivision is available for the offer and sale of the securities. The failure to file the notice as required by this subdivision and the rules of the commissioner shall not affect the availability of this exemption. An issuer who fails to file the notice within the time specified by this subdivision shall, within 15 business days after discovery of the failure to file the notice or after demand by the commissioner, whichever occurs first, file the notice and pay to the commissioner a fee equal to the fee payable had the transaction been qualified under Section 25110. The notice, except when filed on behalf of a California corporation, shall be accompanied by an irrevocable consent, in the form that the commissioner by rule prescribes, appointing the commissioner or the commissioner’s successor in office to be the issuer’s attorney to receive service of any lawful process in any noncriminal suit, action, or proceeding against it or its successor that arises under this law or any rule or order hereunder after the consent has been filed, with the same force and validity as if served personally on the issuer. An issuer on whose behalf a consent has been filed in connection with a previous qualification or exemption from qualification under this law (or application for a permit under any prior law if the application or notice under this law states that the consent is still effective) need not file another. Service may be made by leaving a copy of the process in the office of the commissioner, but it is not effective unless (A) the plaintiff, who may be the commissioner in a suit, action, or proceeding instituted by the commissioner, forthwith sends notice of the service and a copy of the process by registered or certified mail to the defendant or respondent at its last address on file with the commissioner, and (B) the plaintiff’s affidavit of compliance with this section is filed in the case on or before the return day of the process, if any, or within the further time as the court allows. (5) Each purchaser represents that the purchaser is purchasing for the purchaser’s own account, or a trust account if the purchaser is a trustee, and not with a view to or for sale in connection with any distribution of the stock. For the purposes of this subdivision, all securities held by spouses, whether or not jointly, shall be considered to be owned by one person, and all securities held by a corporation that has issued stock pursuant to this exemption shall be considered to be held by the shareholders to whom it has issued the stock. All stock issued by a corporation pursuant to this subdivision as it existed prior to the effective date of the amendments to this section made during the 1996 portion of the 1995–96 Regular Session that required the issuer to have stamped or printed prominently on the face of the stock certificate a legend in a form prescribed by rule of the commissioner restricting transfer of the stock in a manner provided for by that rule shall not be subject to the transfer restriction legend requirement and, by operation of law, the corporation is authorized to remove that transfer restriction legend from the certificates of those shares of stock issued by the corporation pursuant to this subdivision as it existed prior to the effective date of the amendments to this section made during the 1996 portion of the 1995–96 Regular Session. (i) Any offer or sale (1) to a bank, savings and loan association, trust company, insurance company, investment company registered under the federal Investment Company Act of 1940, pension or profit-sharing trust (other than a pension or profit-sharing trust of the issuer, a self-employed individual retirement plan, or individual retirement account), or other institutional investor or governmental agency or instrumentality that the commissioner may designate by rule, whether the purchaser is acting for itself or as trustee, or (2) to any corporation with outstanding securities registered under Section 12 of the Securities Exchange Act of 1934 or any wholly owned subsidiary of the corporation that after the offer and sale will own directly or indirectly 100 percent of the outstanding capital stock of the issuer, provided the purchaser represents that it is purchasing for its own account (or for the trust account) for investment and not with a view to or for sale in connection with any distribution of the security. (j) Any offer or sale of any certificate of interest or participation in an oil or gas title or lease (including subsurface gas storage and payments out of production) if either of the following apply: (1) All of the purchasers meet one of the following requirements: (A) Are and have been during the preceding two years engaged primarily in the business of drilling for, producing, or refining oil or gas (or whose corporate predecessor, in the case of a corporation, has been so engaged). (B) Are persons described in paragraph (1) of subdivision (i). (C) Have been found by the commissioner upon written application to be substantially engaged in the business of drilling for, producing, or refining oil or gas so as not to require the protection provided by this law (which finding shall be effective until rescinded). (2) The security is concurrently hypothecated to a bank in the ordinary course of business to secure a loan made by the bank, provided that each purchaser represents that it is purchasing for its own account for investment and not with a view to or for sale in connection with any distribution of the security. (k) Any offer or sale of any security under, or pursuant to, a plan of reorganization under Chapter 11 of the federal bankruptcy law that has been confirmed or is subject to confirmation by the decree or order of a court of competent jurisdiction. (l) Any offer or sale of an option, warrant, put, call, or straddle, and any guarantee of any of these securities, by a person who is not the issuer of the security subject to the right, if the transaction, had it involved an offer or sale of the security subject to the right by the person, would not have violated Section 25110 or 25130. (m) Any offer or sale of a stock to a pension, profit-sharing, stock bonus, or employee stock ownership plan, provided that (1) the plan meets the requirements for qualification under Section 401 of the Internal Revenue Code, and (2) the employees are not required or permitted individually to make any contributions to the plan. The exemption provided by this subdivision shall not be affected by whether the stock is contributed to the plan, purchased from the issuer with contributions by the issuer or an affiliate of the issuer, or purchased from the issuer with funds borrowed from the issuer, an affiliate of the issuer, or any other lender. (n) Any offer or sale of any security in a transaction, other than an offer or sale of a security in a rollup transaction, that meets all of the following criteria: (1) The issuer is (A) a California corporation or foreign corporation that, at the time of the filing of the notice required under this subdivision, is subject to Section 2115, or (B) any other form of business entity, including without limitation a partnership or trust organized under the laws of this state. The exemption provided by this subdivision is not available to a “blind pool” issuer, as that term is defined by the commissioner, or to an investment company subject to the federal Investment Company Act of 1940. (2) Sales of securities are made only to qualified purchasers or other persons the issuer reasonably believes, after reasonable inquiry, to be qualified purchasers. A corporation, partnership, or other organization specifically formed for the purpose of acquiring the securities offered by the issuer in reliance upon this exemption may be a qualified purchaser if each of the equity owners of the corporation, partnership, or other organization is a qualified purchaser. Qualified purchasers include the following: (A) A person designated in Section 260.102.13 of Title 10 of the California Code of Regulations. (B) A person designated in subdivision (i) or any rule of the commissioner adopted thereunder. (C) A pension or profit-sharing trust of the issuer, a self-employed individual retirement plan, or an individual retirement account, if the investment decisions made on behalf of the trust, plan, or account are made solely by persons who are qualified purchasers. (D) An organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, each with total assets in excess of five million dollars ($5,000,000) according to its most recent audited financial statements. (E) With respect to the offer and sale of one class of voting common stock of an issuer or of preferred stock of an issuer entitling the holder thereof to at least the same voting rights as the issuer’s one class of voting common stock, provided that the issuer has only one-class voting common stock outstanding upon consummation of the offer and sale, a natural person who, either individually or jointly with the person’s spouse, (i) has a minimum net worth of two hundred fifty thousand dollars ($250,000) and had, during the immediately preceding tax year, gross income in excess of one hundred thousand dollars ($100,000) and reasonably expects gross income in excess of one hundred thousand dollars ($100,000) during the current tax year or (ii) has a minimum net worth of five hundred thousand dollars ($500,000). “Net worth” shall be determined exclusive of home, home furnishings, and automobiles. Other assets included in the computation of net worth may be valued at fair market value. Each natural person specified above, by reason of that person’s business or financial experience, or the business or financial experience of that person’s professional adviser, who is unaffiliated with and who is not compensated, directly or indirectly, by the issuer or any affiliate or selling agent of the issuer, can be reasonably assumed to have the capacity to protect that person’s interests in connection with the transaction. The amount of the investment of each natural person shall not exceed 10 percent of the net worth, as determined by this subparagraph, of that natural person. (F) Any other purchaser designated as qualified by rule of the commissioner. (3) Each purchaser represents that the purchaser is purchasing for the purchaser’s own account (or trust account, if the purchaser is a trustee) and not with a view to or for sale in connection with a distribution of the security. (4) Each natural person purchaser, including a corporation, partnership, or other organization specifically formed by natural persons for the purpose of acquiring the securities offered by the issuer, receives, at least five business days before securities are sold to, or a commitment to purchase is accepted from, the purchaser, a written offering disclosure statement that shall meet the disclosure requirements of Regulation D (17 C.F.R. 230.501 et seq.), and any other information as may be prescribed by rule of the commissioner, provided that the issuer shall not be obligated pursuant to this paragraph to provide this disclosure statement to a natural person qualified under Section 260.102.13 of Title 10 of the California Code of Regulations. The offer or sale of securities pursuant to a disclosure statement required by this paragraph that is in violation of Section 25401, or that fails to meet the disclosure requirements of Regulation D (17 C.F.R. 230.501 et seq.), shall not render unavailable to the issuer the claim of an exemption from Section 25110 afforded by this subdivision. This paragraph does not impose, directly or indirectly, any additional disclosure obligation with respect to any other exemption from qualification available under any other provision of this section. (5) (A) A general announcement of proposed offering may be published by written document only, provided that the general announcement of proposed offering sets forth the following required information: (i) The name of the issuer of the securities. (ii) The full title of the security to be issued. (iii) The anticipated suitability standards for prospective purchasers. (iv) A statement that (I) no money or other consideration is being solicited or will be accepted, (II) an indication of interest made by a prospective purchaser involves no obligation or commitment of any kind, and, if the issuer is required by paragraph (4) to deliver a disclosure statement to prospective purchasers, (III) no sales will be made or commitment to purchase accepted until five business days after delivery of a disclosure statement and subscription information to the prospective purchaser in accordance with the requirements of this subdivision. (v) Any other information required by rule of the commissioner. (vi) The following legend: “For more complete information about (Name of Issuer) and (Full Title of Security), send for additional information from (Name and Address) by sending this coupon or calling (Telephone Number).” (B) The general announcement of proposed offering referred to in subparagraph (A) may also set forth the following information: (i) A brief description of the business of the issuer. (ii) The geographic location of the issuer and its business. (iii) The price of the security to be issued, or, if the price is not known, the method of its determination or the probable price range as specified by the issuer, and the aggregate offering price. (C) The general announcement of proposed offering shall contain only the information that is set forth in this paragraph. (D) Dissemination of the general announcement of proposed offering to persons who are not qualified purchasers, without more, shall not disqualify the issuer from claiming the exemption under this subdivision. (6) No telephone solicitation shall be permitted until the issuer has determined that the prospective purchaser to be solicited is a qualified purchaser. (7) The issuer files a notice of transaction under this subdivision both (A) concurrent with the publication of a general announcement of proposed offering or at the time of the initial offer of the securities, whichever occurs first, accompanied by a filing fee, and (B) within 10 business days following the close or abandonment of the offering, but in no case more than 210 days from the date of filing the first notice. The first notice of transaction under subparagraph (A) shall contain an undertaking, in a form acceptable to the commissioner, to deliver any disclosure statement required by paragraph (4) to be delivered to prospective purchasers, and any supplement thereto, to the commissioner within 10 days of the commissioner’s request for the information. The exemption from qualification afforded by this subdivision is unavailable if an issuer fails to file the first notice required under subparagraph (A) or to pay the filing fee. The commissioner has the authority to assess an administrative penalty of up to one thousand dollars ($1,000) against an issuer that fails to deliver the disclosure statement required to be delivered to the commissioner upon the commissioner’s request within the time period set forth above. Neither the filing of the disclosure statement nor the failure by the commissioner to comment thereon precludes the commissioner from taking any action deemed necessary or appropriate under this division with respect to the offer and sale of the securities. (o) An offer or sale of any security issued by a corporation or limited liability company pursuant to a purchase plan or agreement, or issued pursuant to an option plan or agreement, where the security at the time of issuance or grant is exempt from registration under the Securities Act of 1933, as amended, pursuant to Rule 701 adopted pursuant to that act (17 C.F.R. 230.701), the provisions of which are hereby incorporated by reference into this section, provided that (1) the terms of any purchase plan or agreement shall comply with Sections 260.140.42, 260.140.45, and 260.140.46 of Title 10 of the California Code of Regulations, (2) the terms of any option plan or agreement shall comply with Sections 260.140.41, 260.140.45, and 260.140.46 of Title 10 of the California Code of Regulations, and (3) the issuer files a notice of transaction in accordance with rules adopted by the commissioner no later than 30 days after the initial issuance of any security under that plan, accompanied by a filing fee as prescribed by subdivision (y) of Section 25608. The failure to file the notice of transaction within the time specified in this subdivision shall not affect the availability of this exemption. An issuer that fails to file the notice shall, within 15 business days after discovery of the failure to file the notice or after demand by the commissioner, whichever occurs first, file the notice and pay the commissioner a fee equal to the maximum aggregate fee payable had the transaction been qualified under Section 25110. Offers and sales exempt pursuant to this subdivision shall be deemed to be part of a single, discrete offering and are not subject to integration with any other offering or sale, whether qualified under Chapter 2 (commencing with Section 25110), or otherwise exempt, or not subject to qualification. (p) An offer or sale of nonredeemable securities to accredited investors (Section 28031) by a person licensed under the Capital Access Company Law (Division 3 (commencing with Section 28000) of Title 4), provided that all purchasers either (1) have a preexisting personal or business relationship with the offeror or any of its partners, officers, directors, controlling persons, or managers (as appointed or elected by the members), or (2) by reason of their business or financial experience or the business or financial experience of their professional advisers who are unaffiliated with and who are not compensated by the issuer or any affiliate or selling agent of the issuer, directly or indirectly, could be reasonably assumed to have the capacity to protect their own interests in connection with the transaction. All nonredeemable securities shall be evidenced by certificates that shall have stamped or printed prominently on their face a legend in a form to be prescribed by rule or order of the commissioner restricting transfer of the securities in the manner as the rule or order provides. The exemption under this subdivision shall not be available for any offering that is exempt or asserted to be exempt pursuant to Section 3(a)(11) of the Securities Act of 1933 (15 U.S.C. Sec. 77c(a)(11)) or Rule 147 (17 C.F.R. 230.147) thereunder or otherwise is conducted by means of any form of general solicitation or general advertising. (q) Any offer or sale of any viatical or life settlement contract or fractionalized or pooled interest therein in a transaction that meets all of the following criteria: (1) Sales of securities described in this subdivision are made only to qualified purchasers or other persons the issuer reasonably believes, after reasonable inquiry, to be qualified purchasers. A corporation, partnership, or other organization specifically formed for the purpose of acquiring the securities offered by the issuer in reliance upon this exemption may be a qualified purchaser only if each of the equity owners of the corporation, partnership, or other organization is a qualified purchaser. Qualified purchasers include the following: (A) A person designated in Section 260.102.13 of Title 10 of the California Code of Regulations. (B) A person designated in subdivision (i) or any rule of the commissioner adopted thereunder. (C) A pension or profit-sharing trust of the issuer, a self-employed individual retirement plan, or an individual retirement account, if the investment decisions made on behalf of the trust, plan, or account are made solely by persons who are qualified purchasers. (D) An organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, each with total assets in excess of five million dollars ($5,000,000) according to its most recent audited financial statements. (E) A natural person who, either individually or jointly with the person’s spouse, (i) has a minimum net worth of one hundred fifty thousand dollars ($150,000) and had, during the immediately preceding tax year, gross income in excess of one hundred thousand dollars ($100,000) and reasonably expects gross income in excess of one hundred thousand dollars ($100,000) during the current tax year or (ii) has a minimum net worth of two hundred fifty thousand dollars ($250,000). “Net worth” shall be determined exclusive of home, home furnishings, and automobiles. Other assets included in the computation of net worth may be valued at fair market value. Each natural person specified above, by reason of that person’s business or financial experience, or the business or financial experience of that person’s professional adviser, who is unaffiliated with and who is not compensated, directly or indirectly, by the issuer or any affiliate or selling agent of the issuer, can be reasonably assumed to have the capacity to protect that person’s interests in connection with the transaction. The amount of the investment of each natural person shall not exceed 10 percent of the net worth, as determined by this subdivision, of that natural person. (F) Any other purchaser designated as qualified by rule of the commissioner. (2) Each purchaser represents that the purchaser is purchasing for the purchaser’s own account (or trust account, if the purchaser is a trustee) and not with a view to or for sale in connection with a distribution of the security. (3) Each natural person purchaser, including a corporation, partnership, or other organization specifically formed by natural persons for the purpose of acquiring the securities offered by the issuer, receives, at least five business days before securities described in this subdivision are sold to, or a commitment to purchase is accepted from, the purchaser, the following information in writing: (A) The name, principal business and mailing address, and telephone number of the issuer. (B) The suitability standards for prospective purchasers as set forth in paragraph (1) of this subdivision. (C) A description of the issuer’s type of business organization and the state in which the issuer is organized or incorporated. (D) A brief description of the business of the issuer. (E) If the issuer retains ownership or becomes the beneficiary of the insurance policy, an audit report of an independent certified public accountant together with a balance sheet and related statements of income, retained earnings, and cashflows that reflect the issuer’s financial position, the results of the issuer’s operations, and the issuer’s cashflows as of a date within 15 months before the date of the initial issuance of the securities described in this subdivision. The financial statements listed in this subparagraph shall be prepared in conformity with generally accepted accounting principles. If the date of the audit report is more than 120 days before the date of the initial issuance of the securities described in this subdivision, the issuer shall provide unaudited interim financial statements. (F) The names of all directors, officers, partners, members, or trustees of the issuer. (G) A description of any order, judgment, or decree that is final as to the issuing entity of any state, federal, or foreign country governmental agency or administrator, or of any state, federal, or foreign country court of competent jurisdiction (i) revoking, suspending, denying, or censuring for cause any license, permit, or other authority of the issuer or of any director, officer, partner, member, trustee, or person owning or controlling, directly or indirectly, 10 percent or more of the outstanding interest or equity securities of the issuer, to engage in the securities, commodities, franchise, insurance, real estate, or lending business or in the offer or sale of securities, commodities, franchises, insurance, real estate, or loans, (ii) permanently restraining, enjoining, barring, suspending, or censuring any such person from engaging in or continuing any conduct, practice, or employment in connection with the offer or sale of securities, commodities, franchises, insurance, real estate, or loans, (iii) convicting any such person of, or pleading nolo contendere by any such person to, any felony or misdemeanor involving a security, commodity, franchise, insurance, real estate, or loan, or any aspect of the securities, commodities, franchise, insurance, real estate, or lending business, or involving dishonesty, fraud, deceit, embezzlement, fraudulent conversion, or misappropriation of property, or (iv) holding any such person liable in a civil action involving breach of a fiduciary duty, fraud, deceit, embezzlement, fraudulent conversion, or misappropriation of property. This subparagraph does not apply to any order, judgment, or decree that has been vacated, overturned, or is more than 10 years old. (H) Notice of the purchaser’s right to rescind or cancel the investment and receive a refund pursuant to Section 25508.5. (I) The name, address, and telephone number of the issuing insurance company, and the name, address, and telephone number of the state or foreign country regulator of the insurance company. (J) The total face value of the insurance policy and the percentage of the insurance policy the purchaser will own. (K) The insurance policy number, issue date, and type. (L) If a group insurance policy, the name, address, and telephone number of the group, and, if applicable, the material terms and conditions of converting the policy to an individual policy, including the amount of increased premiums. (M) If a term insurance policy, the term and the name, address, and telephone number of the person who will be responsible for renewing the policy if necessary. (N) That the insurance policy is beyond the state statute for contestability and the reason therefor. (O) The insurance policy premiums and terms of premium payments. (P) The amount of the purchaser’s moneys that will be set aside to pay premiums. (Q) The name, address, and telephone number of the person who will be the insurance policy owner and the person who will be responsible for paying premiums. (R) The date on which the purchaser will be required to pay premiums and the amount of the premium, if known. (S) A statement to the effect that any projected rate of return to the purchaser from the purchase of a viatical or life settlement contract or a fractionalized or pooled interest therein is based on an estimated life expectancy for the person insured under the life insurance policy; that the return on the purchase may vary substantially from the expected rate of return based upon the actual life expectancy of the insured that may be less than, equal to, or may greatly exceed the estimated life expectancy; and that the rate of return would be higher if the actual life expectancy were less than, and lower if the actual life expectancy were greater than the estimated life expectancy of the insured at the time the viatical or life settlement contract was closed. (T) A statement that the purchaser should consult with the purchaser’s tax adviser regarding the tax consequences of the purchase of the viatical or life settlement contract or fractionalized or pooled interest therein and, if the purchaser is using retirement funds or accounts for that purchase, whether or not any adverse tax consequences might result from the use of those funds for the purchase of that investment. (U) Any other information as may be prescribed by rule of the commissioner. (r) Any offer or sale of any security that meets each of the following criteria: (1) The issuer meets all of the following criteria: (A) Is a California corporation or a foreign corporation, which at the time of filing an application under this subdivision is subject to Section 2115, and neither corporation is a “blind pool” company, as that term is defined by the commissioner. (B) Is not issuing fractional undivided interests in oil or gas rights, or a similar interest in other mineral rights. (C) Is not an investment company subject to the Investment Company Act of 1940. (D) Is not subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934. (2) The offering is conducted in accordance with the requirements of Section 3(a)(11) of the Securities Act of 1933 and Rule 147 (17 C.F.R. 230.147) or Rule 147A (17 C.F.R. 230.147A) under that act. (3) The offering is conducted in accordance with the requirements of Subpart B of Regulation CF (17 C.F.R. 227.100 to 227.206, inclusive), except as follows: (A) The aggregate amount of securities sold to all investors by the issuer in reliance on this subdivision during the 12-month period preceding the date of such offer or sale, including the securities offered in such transaction, shall not exceed three hundred thousand dollars ($300,000). (B) The issuer may comply with the requirements of paragraph (t)(1), instead of paragraph (t)(2), of Section 227.201 of Title 17 of the Code of Federal Regulations. (C) Such issuer shall prominently provide a statement that financial information certified by the principal executive officer of the issuer has been provided instead of financial statements reviewed by a public accountant that is independent of the issuer. The aggregate offering price for all securities sold (within the 12 months before the start, and during the offering, of the securities) under Rule 147 or Rule 147A under the Securities Act of 1933 or in violation of subdivision (a) of Section 5 of that act shall be included in the aggregate offering price for purposes of this paragraph. (4) Integration of offers and sales made in reliance on this section shall be governed by Section 230.152 of Title 17 of the Code of Federal Regulations. (5) The issuer has taken reasonable steps to ensure that each purchaser who is a natural person who is not an accredited investor as defined in Rule 501 (17 C.F.R. 230.501) under the Securities Act of 1933, either alone or with their purchaser representative or representatives, has knowledge and experience in financial and business matters and that they are capable of evaluating the merits and risks of the prospective investment. (6) The purchaser shall have a three-day right to rescind any investment made in any security offered under this subdivision. The three-day period shall end at 11:59 p.m. Pacific standard time on the third business day after the date on which the issuer’s confirmation of its acceptance of the purchaser’s investment is communicated in writing and received by the purchaser. (7) The issuer shall set aside in a separate third-party escrow account all funds raised as part of the offering, to be held in escrow until the time that the minimum offering amount, if any, is reached. If the minimum offering amount is not reached within one year of the effective date of the offering, the issuer shall return all funds to purchasers. (8) The issuer shall not, itself or through any third party not licensed as a broker-dealer, conduct any direct solicitation of the securities offered by this subdivision. (9) The issuer shall not require or impose an obligation on any purchaser or potential purchaser to do any of the following: (A) Waive the right to a jury trial in a court action. (B) Be bound by or subject to any law other than California law. (C) File or resolve any claim or dispute in any forum other than California. (10) The issuer shall file, on a form prescribed by the commissioner, a notice of transactions under this subdivision at least 15 days prior to the publication of an initial offer of the securities. The failure to file the notice or the failure to file the notice within the time specified shall not affect the availability of the exemption so long as the issuer, within 15 business days after discovery of the failure to file the notice or after demand by the commissioner, whichever occurs first, files the notice and pays to the commissioner a fee equal to the fee payable had the transaction been qualified under Section 25110. Neither the filing of the notice nor the failure by the commissioner to comment thereon precludes the commissioner from taking any action that the commissioner deems necessary or appropriate under this division with respect to the offer and sale of the securities. (11) The issuer submits all state, federal, or other filings related to the offer or sale of securities under this subdivision to the Commissioner of the Department of Financial Protection and Innovation. The filings shall be submitted electronically and in compliance with the Americans for Disability Act of 1990 (42 U.S.C. 12101 et seq.) and the Web Content Accessibility Guidelines 2.0, or its subsequent versions. (12) The issuer pays any fees required by subdivision (c) of Section 25608. (13) Any other requirement set forth by rule adopted by the commissioner. (14) To the extent allowable, any inconsistency between federal and state law shall be interpreted to the benefit of investors or potential investors. (Amended by Stats. 2022, Ch. 452, Sec. 72. (SB 1498) Effective January 1, 2023.)
  31. 25102.1.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. )

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    Certain securities offers and sales are exempt from qualification requirements if specified notice, consent, and fee filings are made; an issuer may still choose to apply for qualification.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. ) ## 25102.1. The following transactions are not subject to Sections 25110, 25120, and 25130: (a) Any offer or sale of a security to a “qualified purchaser” as that term is defined by rule of the Securities and Exchange Commission pursuant to Section 18(b)(3) of the Securities Act of 1933 (15 U.S.C. 77r), if all of the following requirements are met: (1) A notice is filed with the commissioner prior to an offer in this state, along with any documents filed with the Securities and Exchange Commission in annual or periodic reports that the commissioner by rule or order deems appropriate. (2) A consent to service of process under Section 25165 is filed with the notice required by paragraph (1). (3) Payment of a notice filing fee provided for in subdivision (b) of Section 25608.1. (b) Any offer and sale of a security with respect to a transaction that is exempt from registration under Section 4(4) of the Securities Act of 1933 pursuant to Section 18(b)(4)(B) of that act. (c) Any offer or sale of a security with respect to a transaction that is exempt from registration under the Securities Act of 1933 pursuant to Section 18(b)(4)(C) of that act. (d) Any offer or sale of a security with respect to a transaction that is exempt from registration under the Securities Act of 1933 pursuant to Section 18 (b)(4)(F) of that act, if all of the following requirements are met: (1) A notice in the form of a copy of the completed Form D (17 C.F.R. 239.500) filed with the Securities and Exchange Commission is filed with the commissioner within 15 days of the first sale in this state, along with documents filed with the Securities and Exchange Commission in annual or periodic reports that the commissioner by rule or order deems appropriate. The commissioner may allow for a notice in the form of the electronic transmission of the information in Form D. (2) A consent to service of process under Section 25165 is filed with the notice as required by paragraph (1). (3) Payment of the notice filing fee provided for in subdivision (c) of Section 25608.1 is made. (e) Notwithstanding the language of subdivisions (a), (b), (c), and (d) of this section, an issuer may file an application for qualification pursuant to Section 25111, 25112, 25113, 25121, 25131, or 25142. (Amended by Stats. 2019, Ch. 143, Sec. 46. (SB 251) Effective January 1, 2020.)
  32. 25102.2.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. )

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    The commissioner can require certain real-estate-related issuers to give extra offering information on a commissioner-prescribed form.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. ) ## 25102.2. The commissioner shall require any issuer that is engaged in the business of purchasing, selling, financing, or brokering real estate, and that relies upon an exemption authorized by subdivision (e), (f), (h), or (n) of Section 25102, for an offering which involves the offer or sale of securities to any person who is not an accredited investor, as defined in Regulation D of the Securities and Exchange Commission (17 C.F.R. 230.501 et seq.), in a transaction that is not registered pursuant to the Securities Act of 1933, to provide additional information regarding the nature of the proposed offering on a form prescribed by the commissioner. This information shall include the names of the issuer’s officers and directors in the case of a corporation, managers in the case of a manager-managed limited liability company, members in the case of a member-managed limited liability company, general partner in the case of a limited partnership, or persons performing similar functions in the case of other types of issuers, the offering disclosure documents provided to prospective purchasers, a list of all state and federal licenses required to further the purposes of the investment, and the names of all licensed persons that will undertake those activities. (Amended by Stats. 2015, Ch. 263, Sec. 4. (SB 647) Effective January 1, 2016.)
  33. 25102.5.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. )

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    Certain sales of notes secured by real property are exempt from Section 25110, if they comply with a referenced Business and Professions Code article.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. ) ## 25102.5. There shall be exempted from Section 25110 a transaction that is the sale of a series of notes secured directly by an interest in the same real property, or the sale of undivided interests in a note secured directly by real property equivalent to a series transaction, that complies with all of the provisions of Article 6 (commencing with Section 10237) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code. For purposes of this section, a real estate broker licensed by the Real Estate Commissioner of this state who engages in the offer and sale of notes secured directly by real property of various makers, which are a series of notes or notes in which undivided interests are offered and sold, shall be deemed to be the issuer of these notes and undivided interests if the notes of the various makers are offered and sold pursuant to a plan or arrangement that is common to the various makers with respect to documentation and loan standards and that include provisions for servicing these notes on behalf of purchasers. (Amended by Stats. 2003, Ch. 902, Sec. 5. Effective January 1, 2004.)
  34. 25103.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. )

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    This section exempts listed transactions from Section 25110 and Section 25120, subject to several conditions and carve-outs.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. ) ## 25103. The following transactions are exempted from the provisions of Section 25110 and Section 25120: (a) Any negotiations or agreements prior to general solicitation of approval by the holders of equity securities, and subject to that approval, of (1) a change in the rights, preferences, privileges, or restrictions of or on outstanding securities, (2) a merger, consolidation, or sale of assets in consideration of the issuance of securities, or (3) an entity conversion transaction. (b) Any change in the rights, preferences, privileges, or restrictions of or on outstanding securities or any entity conversion transaction, unless the holders of at least 25 percent of the outstanding shares or units of any class of securities that will be directly or indirectly affected substantially and adversely by that change or transaction have addresses in this state according to the records of the issuer. (c) Any exchange incident to a merger, consolidation, or sale of assets in consideration of the issuance of securities of another issuer, unless at least 25 percent of the outstanding securities of any class, any holders of which are to receive securities in the exchange, are held by persons who have addresses in this state according to the records of the issuer of which they are holders. This exemption is not available for a rollup transaction as defined by Section 25014.6. The exemption is also not available for a transaction excluded from the definition of rollup transaction by virtue of paragraph (5) or (6) of subdivision (b) of Section 25014.6 if the transaction is one of a series of transactions that directly or indirectly through acquisition or otherwise involves the combination or reorganization of one or more rollup participants. (d) For the purposes of subdivision (b) and subdivision (c) of this section, (1) any securities held to the knowledge of the issuer in the names of broker-dealers or nominees of broker-dealers and (2) any securities controlled by any one person who controls directly or indirectly 50 percent or more of the outstanding securities of that class shall not be considered outstanding. The determination of whether 25 percent of the outstanding securities are held by persons having addresses in this state, for the purposes of subdivision (b) and subdivision (c) of this section, shall be made as of the record date for the determination of the security holders entitled to vote on or consent to the action, if approval of those holders is required, or, if not, as of the date of directors’ approval of that action. (e) Any change (other than a stock split or reverse stock split) in the rights, preferences, privileges, or restrictions of or on outstanding equity securities, except the following if they materially and adversely affect any class of equity securities: (1) to add, change, or delete assessment provisions; (2) to change the rights to dividends thereon; (3) to change the redemption provisions; (4) to make them redeemable; (5) to change the amount payable on liquidation; (6) to change, add, or delete conversion rights; (7) to change, add, or delete voting rights; (8) to change, add, or delete preemptive rights; (9) to change, add, or delete sinking fund provisions; (10) to rearrange the relative priorities of outstanding equity securities; (11) to impose, change, or delete restrictions upon the transfer of equity securities in the organizational documents for the entity; (12) to change the right of holders of equity securities with respect to the calling of special meetings of holders of equity securities; and (13) to change, add, or delete any rights, preferences, privileges, or restrictions of, or on, the outstanding shares or memberships of a mutual water company or other corporation or entity organized primarily to provide services or facilities to its shareholders or members. Changes in the rights, preferences, privileges, or restrictions of or on outstanding equity securities do not materially and adversely affect any class of holders of equity securities within the meaning of this subdivision if they arise from (i) the addition to articles of incorporation of the provisions described or referred to in subdivision (a) of Section 158 upon the conversion of an existing corporation to a close corporation pursuant to subdivision (b) of Section 158, (ii) the deletion from the articles of incorporation of the provisions described or referred to in subdivision (a) of Section 158 upon the voluntary termination of close corporation status pursuant to subdivisions (c) and (e) of Section 158, (iii) the involuntary cessation of close corporation status pursuant to subdivision (e) of Section 158, or (iv) the termination of a shareholders’ agreement pursuant to subdivision (b) of Section 300. (f) Any stock split or reverse stock split, except the following: (1) any stock split or reverse stock split if the corporation has more than one class of shares outstanding and the split would have a material effect on the proportionate interests of the respective classes as to voting, dividends, or distributions; (2) any stock split of a stock that is traded in the market and its market price as of the date of directors’ approval of the stock split adjusted to give effect to the split was less than two dollars ($2) per share; and (3) any reverse stock split if the corporation has the option of paying cash for any fractional shares created by the reverse split and as a result of that action the proportionate interests of the shareholders would be substantially altered. Any shares issued upon a stock split or reverse stock split exempted by this subdivision shall be subject to any conditions previously imposed by the commissioner applicable to the shares with respect to which they are issued. (g) Any change in the rights of outstanding debt securities, except the following if they substantially and adversely affect any class of securities: (1) to change the rights to interest thereon; (2) to change their redemption provisions; (3) to make them redeemable; (4) to extend the maturity thereof or to change the amount payable thereon at maturity; (5) to change their voting rights; (6) to change their conversion rights; (7) to change sinking fund provisions; and (8) to make them subordinate to other indebtedness. (h) Any exchange incident to a merger, consolidation, or sale of assets, other than a rollup transaction (as defined in Section 25014.6), in consideration of the issuance of equity securities of another entity or any entity conversion transaction that meets the following conditions: (1) The exchange incident to a merger, consolidation, or sale of assets or the entity conversion transaction, had the exchange transaction involved the issuance of a security in a transaction subject to the provisions of Section 25110, would have been exempt from qualification by subdivision (f) of Section 25102, without giving effect to paragraph (3) thereof, and either of the following is applicable: (A) (i) Not less than 75 percent of the outstanding equity securities of each constituent or converting entity entitled to vote on the proposed transaction voted in favor of the transaction, (ii) not more than 10 percent of the outstanding equity securities of each constituent or converting entity entitled to vote on the proposed transaction voted against the transaction, and (iii) each constituent or converting entity whose security holders are entitled to vote on the proposed transaction is subject to a state statute that has provisions for dissenters’ rights for holders of equity securities entitled to vote on the proposed transaction that do not vote in favor of or voted against the transaction. (B) (i) The transaction is solely for the purposes of changing the issuer’s state of incorporation or organization, or form of organization, (ii) all the securities of the same class or series, unless all the security holders of the class or series consent, are treated equally, and (iii) the holders of nonredeemable voting equity securities receive nonredeemable voting equity securities. (2) The commissioner may, by rule, require the acquiring or surviving entity to file a notice of transaction under this section. However, the failure to file the notice or the failure to file the notice within the time specified by the rule of the commissioner shall not affect the availability of this exemption. An acquiring or surviving entity that fails to file the notice as provided by rule of the commissioner shall, within 15 business days after demand by the commissioner, file the notice and pay to the commissioner a fee equal to the fee payable had the transaction been qualified under Section 25110 or 25120. (i) Any exchange of securities in connection with any merger or consolidation or sale of corporate assets in consideration wholly or in part of the issuance of securities or any entity conversion transaction under, or pursuant to, a plan of reorganization that pursuant to the provisions of the United States Bankruptcy Code (Title 11 of the United States Code) has been confirmed or is subject to confirmation by the decree or order of a court of competent jurisdiction. (Amended by Stats. 2009, Ch. 500, Sec. 29. (AB 1059) Effective January 1, 2010.)
  35. 25104.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. )

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    This section exempts several kinds of securities offers and sales from Section 25130.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. ) ## 25104. The following transactions are exempted from the provisions of Section 25130: (a) Any offer or sale of a security by the bona fide owner thereof for his or her own account if the sale (1) is not accompanied by the publication of any advertisement and (2) is not effected by or through a broker-dealer in a public offering. (b) Any offer or sale effected by or through a licensed broker-dealer pursuant to an unsolicited order or offer to buy. For the purpose of this subdivision, an inquiry regarding a written bid for a security or a written solicitation of an offer to sell a security made by another broker-dealer within the previous 60 days shall not be considered the solicitation of an order or offer to buy. (c) Any offer or sale to a bank, savings and loan association, trust company, insurance company, investment company registered under the Investment Company Act of 1940, pension or profit-sharing trust (other than a pension or profit-sharing trust of the issuer, a self-employed individual retirement plan, or individual retirement account), or such other institutional investor or governmental agency or instrumentality as the commissioner may designate by rule, whether the purchaser is acting for itself or as trustee; provided the purchaser represents that it is purchasing for its own account (or for the trust account) for investment and not with a view to or for sale in connection with any distribution of the security. (d) Any transaction or agreement between a person on whose behalf an offering is made and an underwriter or among underwriters, if the sale of the securities is exempt from qualification at the time of or qualified prior to distribution in this state, if any. (e) Any offer or sale of any security by or for the account of a bona fide secured party selling the security in the ordinary course of business to liquidate a bona fide debt. (f) Any transaction by an executor, administrator, sheriff, marshal, receiver, trustee in bankruptcy, guardian, or conservator. (g) Any offer (but not a sale) of a security for which a registration statement has been filed under the Securities Act of 1933 but has not yet become effective, or for which an offering statement under Regulation A has been filed but has not yet been qualified, if no stop order or refusal order is in effect and no public proceeding or examination looking toward such an order is pending under Section 8 of that act and no order under Section 25140 or subdivision (a) of Section 25143 is in effect under this division. (h) Any offer or sale of a security if a qualification under Chapter 2 (commencing with Section 25110) of this part for any securities of the same class has become effective within 18 months, or longer period as the commissioner may order provided that each consecutive order shall be for no more than six months, prior to the offer or sale or if a qualification under Chapter 3 (commencing with Section 25120) or Chapter 4 (commencing with Section 25130) of this part for any securities of the same class has become effective within 12 months prior to that offer or sale, provided no order under Section 25140 or subdivision (a) of Section 25143 is in effect under this division with respect to the qualification, and, provided further, that this exemption does not apply to securities offered pursuant to a registration under the Securities Act of 1933 or pursuant to an exemption under Regulation A under that act if the aggregate offering price of the securities offered under such exemption exceeds fifty thousand dollars ($50,000). The commissioner may, by rule or order, withhold this exemption with respect to securities qualified only pursuant to a limited offering qualification. (Amended by Stats. 1993, Ch. 193, Sec. 2. Effective July 26, 1993.)
  36. 25105.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. )

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    The commissioner may exempt certain transactions from Sections 25110, 25120, and 25130 by rule.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 1. Exemptions and Certain Securities and Transactions Not Subject to Qualification [25100 - 25105] ( Heading of Chapter 1 amended by Stats. 1997, Ch. 391, Sec. 4. ) ## 25105. There shall be exempted from the provisions of Section 25110, 25120 or 25130 any other transaction which the commissioner by rule exempts as not being comprehended within the purposes of this law and the qualification of which he finds is not necessary or appropriate in the public interest or for the protection of investors. (Added by Stats. 1968, Ch. 88.)
  37. 2511.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

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    This section defines “reorganization” and its three types: merger reorganization, exchange reorganization, and sale-of-assets reorganization.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2511. “Reorganization” means a merger reorganization, an exchange reorganization, or a sale of assets reorganization. (a) “Merger reorganization” means a merger pursuant to Chapter 11 (commencing with Section 1100) of Division 1 and Chapter 8 (commencing with Section 3200), of this division, other than a short-form merger. (b) “Exchange reorganization” means the acquisition by one domestic social purpose corporation, foreign social purpose corporation, or other business entity in exchange, in whole or in part, for its equity securities, or the equity securities of a domestic social purpose corporation, a foreign social purpose corporation, or an other business entity that is in control of the acquiring entity, of equity securities of another domestic social purpose corporation, foreign social purpose corporation, or other business entity if, immediately after the acquisition, the acquiring entity has control of the other entity. (c) “Sale-of-assets reorganization” means the acquisition by one domestic social purpose corporation, foreign social purpose corporation, or other business entity in exchange in whole or in part for its equity securities, or the equity securities of a domestic social purpose corporation, a foreign social purpose corporation, or an other business entity that is in control of the acquiring entity, or for its debt securities, or debt securities of a domestic social purpose corporation, foreign social purpose corporation, or other business entity that is in control of the acquiring entity, that are not adequately secured and that have a maturity date in excess of five years after the consummation of the reorganization, or both, of all or substantially all of the assets of another domestic social purpose corporation, foreign social purpose corporation, or other business entity. (Amended by Stats. 2014, Ch. 694, Sec. 28. (SB 1301) Effective January 1, 2015.)
  38. 25110.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 2. Issuer Transactions [25110 - 25118] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    A person may not offer or sell a security in an issuer transaction in California unless the sale is qualified or the security or transaction is exempt or not subject to qualification.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 2. Issuer Transactions [25110 - 25118] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25110. It is unlawful for any person to offer or sell in this state any security in an issuer transaction (other than in a transaction subject to Section 25120), whether or not by or through underwriters, unless such sale has been qualified under Section 25111, 25112 or 25113 (and no order under Section 25140 or subdivision (a) of Section 25143 is in effect with respect to such qualification) or unless such security or transaction is exempted or not subject to qualification under Chapter 1 (commencing with Section 25100) of this part. The offer or sale of such a security in a manner that varies or differs from, exceeds the scope of, or fails to conform with either a material term or material condition of qualification of the offering as set forth in the permit or qualification order, or a material representation as to the manner of offering which is set forth in the application for qualification, shall be an unqualified offer or sale. (Amended by Stats. 1997, Ch. 391, Sec. 10. Effective January 1, 1998.)
  39. 25111.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 2. Issuer Transactions [25110 - 25118] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    This section lets certain securities qualify through coordination if a federal registration statement has been filed, but it also requires specific filings, notices, and timing conditions.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 2. Issuer Transactions [25110 - 25118] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25111. (a) Any security for which a registration statement has been filed under the Securities Act of 1933 in connection with the same offering may be qualified by coordination under this section either in an issuer or nonissuer transaction. The term “registration statement” as used in this section includes an offering statement as defined by Rule 252(a) under Regulation A (17 C.F.R. 230.252(a)) under the Securities Act of 1933, as amended. The term “effective,” as used in this section in connection with an offering statement, means an offering statement that has been qualified under Regulation A of the Securities Act of 1933. (b) Except as provided in subdivision (d), an application for qualification under this section shall contain the following information and be accompanied by the following documents, in addition to the information specified in Section 25160 and the consent to service of process required by Section 25165: (1) a copy of the registration statement under the Securities Act of 1933, together with all exhibits (other than exhibits incorporated by reference and those specified by rule of the commissioner, unless requested by the commissioner); (2) an undertaking to forward to the commissioner all future amendments to the registration statement under the Securities Act of 1933, other than an amendment that merely delays the effective date of the registration statement, promptly and in any event not later than the first business day after the day they are forwarded to or filed with the Securities and Exchange Commission, whichever first occurs; and (3) other information required to evidence compliance with any rules of the commissioner. The application must be filed with the commissioner not later than the fifth business day following filing of the registration statement with the Securities and Exchange Commission, unless that time is extended by rule or order of the commissioner. (c) Except as provided in subdivision (d), qualification of the sale of securities under this section automatically becomes effective (and the securities may be offered and sold in accordance with the terms of the application as amended) at the moment the federal registration statement becomes effective if all the following conditions are satisfied: (1) no stop order or order under subdivision (a) of Section 25143 is in effect under this law; (2) the application has been on file with the commissioner for at least 10 days; and (3) a statement of the maximum and minimum proposed offering prices and the maximum underwriting discounts and commissions has been on file for two business days or such shorter period as the commissioner permits by rule or order and the offering is made within those limitations. The applicant shall promptly notify the commissioner by telephone or telegram of the date and time when the federal registration statement became effective and the content of the price amendment, if any, and shall promptly file a posteffective amendment to the application containing the information and documents in the price amendment. “Price amendment” means the final federal amendment that includes a statement of the offering price, underwriting and selling discounts or commissions, amount of proceeds, interest, dividend or conversion rates, call prices and other matters related to the offering price. Upon failure to receive the required notification and posteffective amendment with respect to the price amendment, the commissioner may enter a stop order, without notice or hearing, retroactively denying effectiveness to the application for qualification or suspending its effectiveness until compliance with this subdivision, if he or she promptly notifies the applicant by telephone or telegram (and promptly confirms by letter or telegram when he or she notifies by telephone) of the issuance of the order. If the applicant proves compliance with the requirements of this subdivision as to notice and posteffective amendment, the stop order is void as of the time of its entry. The commissioner may by rule or order waive either or both of the conditions specified in clauses (2) and (3) of this subdivision. If the federal registration statement becomes effective before all the conditions in this subdivision are satisfied and they are not waived, the application for qualification automatically becomes effective as soon as all the conditions are satisfied. If the applicant advises the commissioner of the date when the federal registration statement is expected to become effective, the commissioner shall promptly advise the applicant by telephone or telegram, at the applicant’s expense, whether all the conditions are satisfied and whether he or she then contemplates the institution of a proceeding under Section 25140 or 25143; but this advice by the commissioner does not preclude the institution of such a proceeding at any time. (d) (1) An open-end investment company or a unit investment trust that has previously qualified the sale of its securities pursuant to this section shall, in lieu of filing the application specified in subdivision (b), file pursuant to this subdivision if it has made no material change in its offering and if it is in compliance with all terms of its prior qualification. An application filed pursuant to this subdivision shall contain the following information and be accompanied by the following documents, in addition to the information specified in Section 25160 and the consent to service of process required by Section 25165: (A) a statement that the applicant has made no material change in its offering and that it is in compliance with the terms of its qualification; and (B) a copy of its current registration statement under the Securities Act of 1933. If no stop order or orders under subdivision (a) of Section 25143 are in effect under this law, qualification of the sale of securities under this subdivision automatically becomes effective (and the securities may be offered and sold in accordance with the terms of the application) upon the day following the expiration of its prior qualification pursuant to this section or, if that qualification has expired, upon the first business day following the filing of the application pursuant to this subdivision. Nothing contained in this subdivision shall restrict the authority of the commissioner pursuant to Section 25140 or 25143. (2) A unit investment trust that has not previously applied to qualify the sale of its securities pursuant to this section but that is substantially the same as one or more unit investment trusts previously qualified under this section by the same sponsor, shall file pursuant to this subdivision if it can make the statements specified below. An application filed pursuant to this subdivision shall contain the following information and be accompanied by the following documents, in addition to the information specified in Section 25160 and the consent to service of process required by Section 25165: (A) a statement that the applicant, in its organization, its plan of business, its securities and its offering, is substantially the same as a unit investment trust previously qualified under this section by the same sponsor; (B) a statement that those previously qualified unit investment trusts are in compliance with the terms of their qualifications and (C) a copy of its current registration statement under the Securities Act of 1933. If no stop order or orders under subdivision (a) of Section 25143 are in effect under this law, qualification of the sale of securities under this subdivision automatically becomes effective (and the security may be offered and sold in accordance with the terms of the application) at the moment the federal registration becomes effective or, if the registration is effective when the application is filed, upon the first business day following the filing of the application pursuant to this subdivision. (Amended by Stats. 1996, Ch. 41, Sec. 3. Effective May 6, 1996.)
  40. 25112.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 2. Issuer Transactions [25110 - 25118] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    Certain securities may be qualified by notification, the application must include specified information and documents, and qualification becomes effective automatically after filing if no stop order is in effect.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 2. Issuer Transactions [25110 - 25118] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25112. (a) Any security issued by a person which is the issuer of any security registered under Section 12 of the Securities Exchange Act of 1934 or issued, by an investment company registered under the Investment Company Act of 1940, and which is not eligible for qualification under Section 25111, may be qualified by notification under this section. (b) An application for qualification under this section shall contain such information and be accompanied by such documents as shall be required by rule of the commissioner, in addition to the information specified in Section 25160 and the consent to service of process required by Section 25165. For this purpose, the commissioner may classify issuers and types of securities. (c) If no stop order or order under subdivision (a) of Section 25143 is in effect under this law, qualification of the sale of the securities under this section automatically becomes effective (and the securities may be offered and sold in accordance with the terms of the application as amended) at 12 o’clock noon California time of the 10th business day after the filing of the application or the last amendment thereto or at such earlier time as the commissioner determines. (Added by Stats. 1968, Ch. 88.)
  41. 25113.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 2. Issuer Transactions [25110 - 25118] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    This section lets securities be qualified by permit, sets application and small-company application conditions, and gives the commissioner reporting, examination, and disqualification powers.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 2. Issuer Transactions [25110 - 25118] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25113. (a) All securities, whether or not eligible for qualification by coordination under Section 25111 or qualification by notification under Section 25112, may be qualified by permit under this section. (b) (1) An application for a permit under this section shall contain any information and be accompanied by any documents as shall be required by rule of the commissioner, in addition to the information specified in Section 25160 and the consent to service of process required by Section 25165. For this purpose, the commissioner may classify issuers and types of securities. (2) An applicant may file a small company application for permit under this section if it meets all of the following conditions: (A) The applicant is: (i) a California corporation or a foreign corporation, which at the time of filing an application under this subdivision is subject to Section 2115, and neither corporation is a “blind pool” company, as that term is defined by the commissioner; (ii) not engaged in oil and gas exploration or production, or mining or other extractive industries; (iii) not an investment company subject to the Investment Company Act of 1940; and (iv) not subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934. (B) The total offering of voting common stock and preferred stock by the applicant to be sold in a 12-month period, within or outside this state, is limited to one million dollars ($1,000,000), less the aggregate offering price for all securities sold (within the 12 months before the start, and during the offering, of the voting common stock or preferred stock) under Rule 504 of the Securities and Exchange Commission, in reliance on any exemption under subdivision (b) of Section 3 of the Securities Act of 1933, or in violation of subdivision (a) of Section 5 of that act, and immediately after the proposed sale and issuance there will be only one class of voting common stock. (C) The minimum offering price of the voting common stock and preferred stock (and the conversion price if the preferred stock is convertible into the voting common stock) to be sold is two dollars ($2) per share and the applicant files an undertaking with the commissioner that there will be no stock splits, stock dividends, spinoffs, or mergers for a period of two years from the close of the offering. The undertaking notwithstanding, the commissioner may approve a spinoff or merger pursuant to an application for qualification filed by an applicant. (D) The net proceeds from the offering are to be expended in the operations of the business. (E) The offering is made pursuant to a Small Corporate Offering Registration disclosure document based on the Form U-7 as adopted by the North American Securities Administrators Association and any additional requirements as the commissioner shall prescribe, that may include, but not be limited to, investor suitability and due diligence investigation requirements. (F) The application and disclosure document is reviewed and signed by a majority of the members of the board of directors of the applicant. (G) The application shall contain that information and be accompanied by those documents required by rule of the commissioner, in addition to the information specified in Section 25610 and the consent to service of process required by Section 25165. (c) Qualification of securities under this section becomes effective upon the commissioner issuing a permit authorizing the issuance of those securities. (d) The commissioner shall annually prepare a report, and make that report publicly available by posting the report on the department’s Internet Web site, summarizing data collected from persons to which it issues permits pursuant to this section. The report shall include, but not be limited to, a summary of the general categories of investments for which permits are approved; the minimum, maximum, and average net worth required of those persons to whom permits are issued for each category of activity; the least stringent and most stringent suitability standards imposed on persons issued permits for each category of activity; the experience requirements imposed on persons issued permits for each category of activity; the total dollar amount of money sought to be raised per category of activity; the number and nature of enforcement actions taken against permitholders; and any other information the commissioner deems relevant to inform the Legislature about the activities of permitholders and the protections for those who invest with permitholders. The commissioner shall take steps to ensure that the publication of data collected from permitholders does not result in the release of proprietary information about individuals or businesses. (e) The commissioner may examine those persons to whom permits are issued pursuant to this section to review compliance with the conditions of the permit and other applicable state law. The commissioner may disqualify an offering permitted pursuant to this section if he or she finds that the issuer has materially violated the provisions of its permit. (Amended by Stats. 2012, Ch. 669, Sec. 6. (SB 978) Effective January 1, 2013.)
  42. 25114.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 2. Issuer Transactions [25110 - 25118] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    A qualification under this chapter lasts 12 months from its effective date, unless the commissioner sets a different period by order or rule.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 2. Issuer Transactions [25110 - 25118] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25114. Every qualification under this chapter is effective for 12 months from its effective date, unless the commissioner by order or rule specifies a different period, except during the time an order under Section 25140 or subdivision (a) of Section 25143 is in effect. (Added by Stats. 1968, Ch. 88.)
  43. 25115.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 2. Issuer Transactions [25110 - 25118] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    Applications for qualification must be signed and verified by the issuer, and nonissuer qualification applications under Section 25111 must be signed and verified by the person offering the securities or by the issuer on that person’s behalf.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 2. Issuer Transactions [25110 - 25118] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25115. Every application for qualification of an issuer transaction under this chapter shall be signed and verified by the issuer; every application for qualification of a nonissuer transaction under Section 25111 shall be signed and verified by the person on whose behalf the offering is being made or by the issuer on behalf of such person. (Amended by Stats. 1970, Ch. 612.)
  44. 25116.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 2. Issuer Transactions [25110 - 25118] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    Certain evidence of indebtedness issued under this chapter, and its purchasers or holders, are exempt from the Constitution’s usury rules if the issuer and purchaser follow any commissioner-imposed conditions.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 2. Issuer Transactions [25110 - 25118] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25116. (a) An evidence of indebtedness issued pursuant to a qualification under this chapter or Chapter 3 (commencing with Section 25120), and the purchasers or holders thereof, shall be exempt from the usury provisions of the Constitution, subject to compliance by the issuer and purchaser with the terms and requirements that may be imposed by the commissioner as a condition of the qualification. This section creates and authorizes a class of transactions and persons pursuant to Section 1 of Article XV of the Constitution. (b) Any evidence of indebtedness issued in compliance with this section shall be entitled to the benefits of the usury exemption contained in this section regardless of whether subsequent to its issuance the evidence of indebtedness is determined by a court of competent jurisdiction to be a “security.” (Amended by Stats. 1996, Ch. 477, Sec. 2. Effective January 1, 1997.)
  45. 25117.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 2. Issuer Transactions [25110 - 25118] ( Chapter 2 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    Certain evidences of indebtedness and their purchasers or holders are exempt from California usury rules if the rating, listing, issuer-status, or ownership conditions are met.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 2. Issuer Transactions [25110 - 25118] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25117. (a) An evidence of indebtedness, and the purchasers or holders thereof, shall be exempt from the usury provisions of Section 1 of Article XV of the California Constitution if (1) the evidence of indebtedness is rated or provisionally rated by Standard & Poor’s Corporation as AAA, AA, A, BBB, or investment grade commercial paper, or by Moody’s Investors Service, Inc. as Aaa, Aa, A, Baa, or investment grade commercial paper, including any such ratings with “+” or “—” designation or other variations that occur within these ratings, or has a rating or a provisional rating by another nationally recognized rating agency or system, which rating and agency or system have been certified by rule or order of the commissioner, or (2) the issuer thereof either (A) has any security listed or approved for listing upon notice of issuance on a national securities exchange, if the exchange has been certified by the commissioner, pursuant to subdivision (o) of Section 25100, or (B) meets each of the following requirements: (i) The issuer is a corporation which is subject to Section 13 of the Securities Exchange Act of 1934. (ii) The issuer had total shareholders’ equity of at least one million dollars ($1,000,000) at the end of its most recent fiscal year, and had consolidated net income, after all charges, including taxes and extraordinary losses, and excluding extraordinary gains, of at least five hundred thousand dollars ($500,000) for three of its last four fiscal years, including its most recent fiscal year. The determination of total shareholders’ equity and net income shall be determined in conformity with generally accepted accounting principles applicable to that fiscal year or years, on a consolidated basis, or (3) the evidence of indebtedness is issued by any corporation all of the outstanding shares of which are owned by an issuer which meets the requirements of subparagraph (A) or (B) of paragraph (2). (b) This section creates and authorizes a class of transactions and persons pursuant to Section 1 of Article XV of the California Constitution. (c) Any evidence of indebtedness issued in compliance with this section shall be entitled to the benefits of the usury exemption contained in this section regardless of whether subsequent to its issuance the evidence of indebtedness is determined by a court of competent jurisdiction to be a “security.” (Amended by Stats. 2009, Ch. 131, Sec. 11. (AB 991) Effective January 1, 2010.)
  46. 25118.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 2. Issuer Transactions [25110 - 25118] ( Chapter 2 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    Certain evidences of indebtedness and their purchasers or holders can be exempt from California’s usury rules if the statutory conditions are met.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 2. Issuer Transactions [25110 - 25118] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25118. (a) An evidence of indebtedness issued by an entity or guaranteed by an entity that is an affiliate (as defined in Section 150) of the borrower that, on the day the evidence of indebtedness issued or guaranty is first issued or entered into, has total assets of at least two million dollars ($2,000,000) according to its then most recent financial statements, and the purchasers or holders thereof, shall be exempt from the usury provisions of the California Constitution. The financial statements referred to in the preceding sentence shall meet both of the following requirements: (1) Be as of a date not more than 90 days before the date the evidence of indebtedness or guaranty is first issued or entered into. (2) Be prepared in accordance with either of the following: (A) In accordance with generally accepted accounting principles and, if the entity has consolidated subsidiaries, on a consolidated basis. (B) In accordance with the rules and requirements of the Securities and Exchange Commission, whether or not required by law to be prepared in accordance with those rules and requirements. (b) Any one or more evidences of indebtedness, and the purchasers or holders thereof, shall be exempt from the usury provisions of the California Constitution if either of the following applies: (1) The evidences of indebtedness aggregate at the time of issuance at least three hundred thousand dollars ($300,000) in original face amount, or, if the evidences of indebtedness are purchased with original issue discount, they are purchased for an aggregate purchase price at the time of issuance of at least three hundred thousand dollars ($300,000). (2) The evidences of indebtedness are issued pursuant to a bona fide written commitment for the lending to the issuer of at least three hundred thousand dollars ($300,000), or the provision of a line of credit to the issuer in a principal amount of at least three hundred thousand dollars ($300,000). The exemption provided by this paragraph shall not be affected by a subsequent event of default or other event not in the lender’s control that has relieved or may relieve the lender from its commitment. (c) Any evidence of indebtedness described in subdivision (a) or (b), and the purchasers or holders thereof, shall be entitled to the benefits of the usury exemption contained in this section regardless of whether, at any time after the evidence of indebtedness or guaranty upon which the exemption is based is first issued or entered into, the evidence of indebtedness or guaranty is determined by a court of competent jurisdiction not to be a “security.” (d) This section creates and authorizes a class of transactions and persons pursuant to Section 1 of Article XV of the California Constitution. (e) This section does not apply to: (1) Any evidence of indebtedness issued or guaranteed (if the guaranty is part of the consideration for the indebtedness) by an individual, a revocable trust having one or more individuals as trustors, or a partnership in which, at the time of issuance, one or more individuals are general partners. (2) Any transaction subject to the limitation on permissible rates of interest set forth in paragraph (1) of the first sentence of Section 1 of Article XV of the California Constitution. (f) The exemptions created by this section shall only be available in a transaction that meets either of the following criteria: (1) The lender and either the issuer of the indebtedness or the guarantor, as the case may be, or any of their respective officers, directors, or controlling persons, or, if any party is a limited liability company, the managers as appointed or elected by the members, have a preexisting personal or business relationship. (2) The lender and the issuer, or the lender and the guarantor, by reason of their own business and financial experience or that of their professional advisers, could reasonably be assumed to have the capacity to protect their own interests in connection with the transaction. (g) For purposes of this section, “preexisting personal or business relationship” and “capacity to protect their own interests in connection with the transaction” as used in subdivision (f) shall have the same meaning as, and be determined according to the same standards as, specified in paragraph (2) of subdivision (f) of Section 25102 and its implementing regulations provided that, solely with respect to this section, a lender or purchaser who is represented by counsel may designate that person as its professional adviser whether or not that person is compensated by the issuer or guarantor, as long as that person has a bona fide attorney-client relationship with the lender or purchaser. (h) This section shall not exempt any person from the application of the California Financing Law (Division 9 (commencing with Section 22000) of the Financial Code). (Amended by Stats. 2019, Ch. 143, Sec. 47. (SB 251) Effective January 1, 2020.)
  47. 2512.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

    Verify source ↗

    This section defines “share exchange tender offer.”

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2512. “Share exchange tender offer” means any acquisition by one social purpose corporation in exchange in whole or in part for its equity securities, or the equity securities of a corporation or a social purpose corporation that is in control of the acquiring social purpose corporation, of shares of another corporation or social purpose corporation, other than an exchange reorganization (subdivision (b) of Section 2511). (Amended by Stats. 2014, Ch. 694, Sec. 29. (SB 1301) Effective January 1, 2015.)
  48. 25120.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 3. Recapitalizations and Reorganizations [25120 - 25122] ( Chapter 3 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    A person must not offer or sell certain securities in California in the listed recapitalization, exchange, merger, consolidation, asset purchase, or entity conversion transactions, unless an exception applies.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 3. Recapitalizations and Reorganizations [25120 - 25122] ( Chapter 3 added by Stats. 1968, Ch. 88. ) ## 25120. (a) Except as provided in subdivision (b), it is unlawful for any person to offer or sell in this state any security in any of the following manners: (1) In an issuer transaction in connection with any change in the rights, preferences, privileges, or restrictions of or on outstanding securities. (2) In any exchange of securities by the issuer with its existing security holders exclusively. (3) In any exchange in connection with any merger or consolidation or purchase of assets in consideration wholly or in part of the issuance of securities. (4) In an entity conversion transaction. (b) Subdivision (a) shall not apply to a security if the security is qualified for sale under this chapter (and no order under Section 25140 or subdivision (a) of Section 25143 is in effect with respect to the qualification) or if the security or transaction is exempted or not subject to qualification under Chapter 1 (commencing with Section 25100) of this part. (Amended by Stats. 2002, Ch. 964, Sec. 2. Effective January 1, 2003.)
  49. 25121.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 3. Recapitalizations and Reorganizations [25120 - 25122] ( Chapter 3 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    Securities qualified for sale under this chapter must be qualified by permit, and the issuer must sign and verify the permit application.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 3. Recapitalizations and Reorganizations [25120 - 25122] ( Chapter 3 added by Stats. 1968, Ch. 88. ) ## 25121. The securities qualified for sale under this chapter shall be qualified by permit under this section. The application for the permit shall be signed and verified by the issuer and shall contain such information and be accompanied by such documents as shall be required by rule of the commissioner, in addition to the information specified in Section 25160 and the consent to service of process required by Section 25165. For this purpose, the commissioner may classify issuers and types of securities and transactions. (Added by Stats. 1968, Ch. 88.)
  50. 25122.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 3. Recapitalizations and Reorganizations [25120 - 25122] ( Chapter 3 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    Securities qualification under this chapter takes effect when the commissioner issues a permit authorizing issuance of the securities.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 3. Recapitalizations and Reorganizations [25120 - 25122] ( Chapter 3 added by Stats. 1968, Ch. 88. ) ## 25122. Qualification of securities under this chapter becomes effective upon the commissioner issuing a permit authorizing the issuance of such securities. (Added by Stats. 1968, Ch. 88.)
  51. 2513.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

    Verify source ↗

    “Special purpose” means the special purpose stated in a social purpose corporation’s articles under Section 2602(b).

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2513. “Special purpose” means the special purpose set forth in a social purpose corporation’s articles pursuant to subdivision (b) of Section 2602. (Amended by Stats. 2014, Ch. 694, Sec. 30. (SB 1301) Effective January 1, 2015.)
  52. 25130.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 4. Nonissuer Transactions [25130 - 25134] ( Chapter 4 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    A person may not offer or sell a security in California in a nonissuer transaction unless the security is qualified or exempt.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 4. Nonissuer Transactions [25130 - 25134] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25130. It is unlawful for any person to offer or sell any security in this state in any nonissuer transaction unless it is qualified for such sale under this chapter or under Section 25111 or 25113 of Chapter 2 (commencing with Section 25110) of this part (and no order under Section 25140 or subdivision (a) of Section 25143 is in effect with respect to such qualification) or unless such security or transaction is exempted or not subject to qualification under Chapter 1 (commencing with Section 25100) of this part. (Amended by Stats. 1997, Ch. 391, Sec. 12. Effective January 1, 1998.)
  53. 25131.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 4. Nonissuer Transactions [25130 - 25134] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    Certain nonissuer securities must be qualified by notification, and the application must be signed, verified, and include required information and documents.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 4. Nonissuer Transactions [25130 - 25134] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25131. (a) The securities to be offered or sold in a nonissuer transaction, which are not eligible for qualification under Section 25111, shall be qualified by notification under this section; provided however that securities offered in a nonissuer transaction pursuant to an exemption under Regulation A under the Securities Act of 1933 shall be qualified under Section 25113. (b) The application for qualification by notification under this section shall be signed and verified by the person on whose behalf the offering is being made or by the issuer or by any broker-dealer and shall contain such information and be accompanied by such documents as shall be required by rule of the commissioner, in addition to the information specified in Section 25160 and the consent to service of process required by Section 25165. For this purpose, the commissioner may classify issuers and types of securities. (c) If no stop order or order under subdivision (a) of Section 25143 is in effect under this law, a qualification under this section automatically becomes effective (and the securities may be offered and sold in accordance with the terms of the application as amended) at 12 o’clock noon California time on the 10th business day after the filing of the application or the last amendment thereto or at such earlier time as the commissioner determines. (d) Information may not be required under this section unless it is known to the person filing the application or to the persons on whose behalf the distribution is to be made, or can be furnished by them without unreasonable effort or expense. (Amended by Stats. 1974, Ch. 1103.)
  54. 25132.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 4. Nonissuer Transactions [25130 - 25134] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    Qualifications under this chapter generally last 12 months from the effective date, unless a stop order or certain order is in effect.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 4. Nonissuer Transactions [25130 - 25134] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25132. Every qualification under this chapter and every qualification of a nonissuer transaction under Section 25111 is effective for 12 months from its effective date, except during the time a stop order under Section 25140 or an order under subdivision (a) of Section 25143 is in effect. A qualification under this chapter may be withdrawn only in the discretion of the commissioner. The commissioner may by rule or order extend the effective period of any qualification under this chapter. (Added by Stats. 1968, Ch. 88.)
  55. 25133.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 4. Nonissuer Transactions [25130 - 25134] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    A person must not sell or transfer certain escrowed securities without the commissioner’s written consent.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 4. Nonissuer Transactions [25130 - 25134] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25133. It is unlawful for any person without the written consent of the commissioner to consummate the sale or transfer of any securities heretofore or hereafter placed in escrow pursuant to a condition ordered by the commissioner and that have not been released from escrow, or that are subject to a currently effective legend condition requiring such consent (except as permitted therein), or concerning which the commissioner has issued a written notice to the holders thereof pursuant to Section 25534 ordering the certificates evidencing the securities to be stamped or printed with a legend as provided in the section. (Amended by Stats. 1996, Ch. 41, Sec. 5. Effective May 6, 1996.)
  56. 25134.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 4. Nonissuer Transactions [25130 - 25134] ( Chapter 4 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    An applicant seeking qualification to sell securities must, if the commissioner asks, provide authorization to examine the applicant’s financial records for the sale.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 4. Nonissuer Transactions [25130 - 25134] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25134. Every applicant seeking qualification for the sale of securities shall, upon request of the commissioner, furnish to the commissioner an authorization for examination of the applicant’s financial records of the sale of such securities pursuant to Section 7473 of the Government Code. (Added by Stats. 1976, Ch. 1320.)
  57. 2514.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

    Verify source ↗

    This section defines “special purpose current report” as the report a social purpose corporation must file under Section 3501.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2514. “Special purpose current report” means the report required of a social purpose corporation pursuant to Section 3501. (Amended by Stats. 2014, Ch. 694, Sec. 31. (SB 1301) Effective January 1, 2015.)
  58. 25140.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    The commissioner may stop, suspend, revoke, or refuse certain securities qualifications and permits if specified fairness, honesty, and fraud-related findings are not satisfied.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. ) ## 25140. (a) (1) The commissioner may issue a stop order denying effectiveness to, or suspending or revoking the effectiveness of, any qualification of an underwritten offering of securities under Section 25111, 25112 or 25131 or may suspend or revoke any permit issued under Section 25113 or 25122 if he or she finds (A) that the order is in the public interest and (B) that the proposed plan of business of the issuer or the proposed issuance or sale of securities is not fair, just, or equitable, or that the issuer does not intend to transact its business fairly and honestly, or that the securities proposed to be issued or the method to be used in issuing them will tend to work a fraud upon the purchaser thereof. (2) In the case of an application for or qualification of securities under Section 25111, 25112, or 25131 that is not an underwritten offering of securities, the commissioner may issue a stop order denying effectiveness to, or suspending or revoking the effectiveness of the qualification unless he or she finds (A) that the stop order is not in the public interest and (B) that the proposed plan of business of the applicant or the proposed issuance of securities is fair, just, and equitable, that the issuer intends to transact its business fairly and honestly, and that the securities that the issuer proposes to issue or the method to be used in issuing them are not such as will work a fraud upon the purchaser thereof. (b) The commissioner may refuse to issue a permit under Section 25113 unless he or she finds that the proposed plan of business of the applicant and the proposed issuance of securities are fair, just, and equitable, that the applicant intends to transact its business fairly and honestly, and that the securities which it proposes to issue and the methods to be used by it in issuing them are not such as, in his or her opinion, will work a fraud upon the purchaser thereof. (c) The commissioner may refuse to issue a permit under Section 25122 unless he or she finds that the proposed plan of recapitalization or reorganization and the proposed issuance of securities are fair, just, and equitable to all security holders affected. (d) Notwithstanding the provisions of subdivisions (a) and (b) of this section, the commissioner shall not have authority to issue any stop order or to refuse to issue or to suspend or revoke any permit on the basis that the price at which the security is to be offered is unfair, unjust or inequitable in any case where the security is being publicly offered for cash pursuant to a registration statement under the Securities Act of 1933 and the offering is the subject of a firm commitment underwriting by an underwriter or syndicate of underwriters all of whom are registered under the Securities Exchange Act of 1934. For the purposes of this subdivision a firm commitment underwriting means an underwriting pursuant to which the underwriter or syndicate of underwriters is committed to take up and pay for the securities subject only to the usual or customary conditions, but not including any “market out” or similar condition operative after the time of commencement of the offering. (A condition relating to the suspension of all trading on a national securities exchange, a banking holiday, war, civil insurrection, or the like is not a “market out” or similar condition within the meaning of this subdivision.) Nothing contained in this subdivision shall deny authority to the commissioner to issue a stop order or to refuse to issue or to suspend or revoke a permit because of unreasonable discounts, commissions or other compensation to underwriters, sellers or others, unreasonable promoters’ profits or participations or unreasonable amounts or kinds of options. (Amended by Stats. 1990, Ch. 1035, Sec. 2.)
  59. 25141.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    The commissioner may require conditions for certain securities qualification approvals and may later change or remove those conditions.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. ) ## 25141. The commissioner may impose as a condition of qualification under Chapter 2 (commencing with Section 25110) or Chapter 3 (commencing with Section 25120) of this part conditions requiring the deposit in escrow of securities, imposing a legend condition restricting the transferability thereof, impounding the proceeds from the sale thereof, limiting the expense in connection with the sale thereof, requiring the waiver of assets, dividends or voting rights by the holders of promotional securities, or any other condition if the commissioner finds that without such condition the offering will be unfair, unjust or inequitable. The commissioner may in his or her discretion modify or remove any such conditions when in his or her opinion they are no longer necessary or appropriate. (Amended by Stats. 1996, Ch. 41, Sec. 6. Effective May 6, 1996.)
  60. 25142.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    The commissioner may approve the terms and fairness of certain securities-for-property exchanges and may hold a hearing on that fairness. Applicants for a permit to deliver non-security consideration must use the required form and provide the required information and documents.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. ) ## 25142. When application is made for a permit to issue securities or to deliver other consideration (whether or not the security or transaction is exempt from qualification or not required to be qualified) in exchange for one or more bona fide outstanding securities, claims, or property interests, or partly in such exchange and partly for cash, the commissioner is expressly authorized to approve the terms and conditions of such issuance and exchange or such delivery and exchange and the fairness of such terms and conditions, and is expressly authorized to hold a hearing upon the fairness of such terms and conditions, at which all persons to whom it is proposed to issue securities or to deliver such other consideration in such exchange have the right to appear. The application for a permit to deliver consideration other than securities shall be in such form, contain such information and be accompanied by such documents as shall be required by rule of the commissioner or, in the absence thereof, in substantially the form of an application filed pursuant to Section 25121. (Amended by Stats. 1977, Ch. 235.)
  61. 25143.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    The commissioner may pause or suspend a securities qualification order, but must give prompt notice and provide hearings within specified time limits when requested.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. ) ## 25143. (a) The commissioner may by order summarily postpone or suspend the effectiveness of any qualification pending final determination of any proceeding under this chapter. Upon the entry of the order, the commissioner shall promptly notify each person specified in subdivision (b) of this section that it has been entered and of the reasons therefor and that upon the receipt of a written request the matter will be set down for hearing to commence within 15 business days after such receipt unless the applicant consents to a later date. If no hearing is requested and none is ordered by the commissioner, the order will remain in effect until it is modified or vacated by the commissioner. If a hearing is requested or ordered, the commissioner, after notice and hearing in accordance with subdivision (b) of this section, may modify or vacate the order or extend it until final determination. (b) No stop order may be entered under this chapter except under subdivision (a) of this section without appropriate prior notice to the applicant, the issuer, and the person on whose behalf the securities are to be or have been offered and hearing in accordance with the provisions of the Administrative Procedure Act, Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, in connection with which the commissioner shall have all of the powers granted thereunder. In the case of qualification by permit, such hearing shall be held upon such notice within 20 business days after a written request therefor by the applicant unless the permit is issued prior to the expiration of such period or the applicant consents to a later date. (Amended by Stats. 1973, Ch. 390.)
  62. 25144.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    The commissioner may vacate or modify a stop order if the conditions that caused it have changed or if doing so is otherwise in the public interest.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. ) ## 25144. The commissioner may vacate or modify a stop order if he finds that the conditions which caused its entry have changed or that it is otherwise in the public interest to do so. (Added by Stats. 1968, Ch. 88.)
  63. 25145.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    Issuers qualifying securities for sale in this state must keep complete sales and proceeds records, and file a report with the commissioner when required.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. ) ## 25145. Every issuer qualifying securities for sale in this state shall at all times keep and maintain a complete set of books, records, and accounts of such sales and the disposition of the proceeds thereof, and shall thereafter, at such times as are required by the commissioner, make and file in the office of the commissioner a report, setting forth the securities sold by it under such qualification, the proceeds derived therefrom and the disposition thereof. (Added by Stats. 1968, Ch. 88.)
  64. 25146.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    The commissioner may require an issuer that has filed an application to submit reports, but not more than twice a year, for 18 months after qualification becomes effective.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. ) ## 25146. For a period of 18 months after the qualification is effective, the commissioner may by rule or order require an issuer who has filed an application to file reports not more often than semiannually for the purpose of keeping reasonably current the information contained in the application; provided, that the commissioner may not require the filing of any such report after completion of the offering if a nonissuer transaction in the security would be entitled to exemption under Section 25101. (Amended by Stats. 1988, Ch. 598, Sec. 2.)
  65. 25147.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    The commissioner may, by rule or order, require qualifying securities to be sold only on a specified contract form and require a copy of each contract to be kept for up to three years.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. ) ## 25147. The commissioner may by rule or order require as a condition of qualification that any security qualified under Section 25113 be sold only on a specified form of subscription or sale contract, and that a signed or conformed copy of each contract be preserved for any period up to three years specified in the rule or order. (Added by Stats. 1968, Ch. 88.)
  66. 25148.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    The commissioner may require a prospectus or proxy statement to be given to offerees as a condition of qualification, except where federal securities laws already require that delivery.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. ) ## 25148. Except in cases where the delivery of a prospectus or proxy statement is required under the Securities Act of 1933 or the Securities Exchange Act of 1934, the commissioner may by rule or order require as a condition of qualification under Section 25112, 25113, 25122 or 25131 that a prospectus or proxy statement containing any designated part of the information required in the application be given to each person to whom an offer is made before the sale of the security to be issued under the permit or order. (Amended by Stats. 1983, Ch. 442, Sec. 2.)
  67. 25149.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    The commissioner may act as escrow holder for securities that must be deposited in escrow under the commissioner’s order.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. ) ## 25149. The commissioner may act as escrow holder for securities required to be deposited in escrow by his order. (Added by Stats. 1968, Ch. 88.)
  68. 2515.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

    Verify source ↗

    This section defines “Special purpose MD&A” as the management discussion and analysis that a social purpose corporation must prepare under Section 3500(b).

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2515. “Special purpose MD&A” means the management discussion and analysis required of a social purpose corporation pursuant to subdivision (b) of Section 3500. (Amended by Stats. 2014, Ch. 694, Sec. 32. (SB 1301) Effective January 1, 2015.)
  69. 25150.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    The commissioner may rely on expert opinions and may also order independent investigation, appraisal, review, and certification of facts about securities proposed for sale.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. ) ## 25150. The commissioner may accept and act upon the opinions, appraisements and reports of any engineers, appraisers, or other experts which may be presented by an applicant on any question of fact concerning or affecting the securities proposed to be offered and sold. In lieu of, or in addition to, such opinions, appraisements, and reports, the commissioner may have any or all matters concerning or affecting such securities investigated, appraised, passed upon and certified to him by engineers, appraisers, or other experts selected by him. (Repealed and added by Stats. 1968, Ch. 88.)
  70. 25151.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    If a written request to transfer certain securities is filed with the required information and documents, the commissioner must issue consent if the transfer is fair, just, and equitable to the proposed transferees; otherwise, the commissioner must deny consent.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 5. Authority of the Commissioner [25140 - 25151] ( Chapter 5 added by Stats. 1968, Ch. 88. ) ## 25151. (a) Upon the filing of a written request for the consent to transfer securities referred to in Section 25133, accompanied by such information and documents as the commissioner may by rule require, the commissioner shall issue such consent if the commissioner finds that the transfer requested will be fair, just, and equitable to the proposed transferees, and otherwise the commissioner shall deny such consent. (b) The issuance of the commissioner’s consent pursuant to this section shall not be a qualification of the transaction pursuant to, nor an exemption from the qualification requirements of, Section 25110, 25120, or 25130. (Amended by Stats. 1984, Ch. 577, Sec. 5.)
  71. 2516.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

    Verify source ↗

    This section defines “special purpose objectives” as the objectives set by a social purpose corporation’s management and directors to measure the impact of its efforts relating to its special purpose.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2516. “Special purpose objectives” means those objectives set forth by management and the directors of a social purpose corporation for purposes of measuring the impact of the social purpose corporation’s efforts relating to its special purpose in accordance with Section 3500. (Amended by Stats. 2014, Ch. 694, Sec. 33. (SB 1301) Effective January 1, 2015.)
  72. 25160.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 6. General Provisions [25160 - 25166] ( Chapter 6 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    Qualification applications must include specified disclosure, be verified under Civil Procedure rules, and stay complete, true, and updated before effectiveness.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 6. General Provisions [25160 - 25166] ( Chapter 6 added by Stats. 1968, Ch. 88. ) ## 25160. Every application for qualification shall state (1) the maximum amount of securities proposed to be offered in this state; and (2) any adverse order, judgment, or decree entered in connection with the offering by the regulatory authority in any state or by any court or by the Securities and Exchange Commission. Verification of an application shall be in the manner provided in the Code of Civil Procedure for the verification of pleadings. All information required to be included in an application shall be true and complete as of the time the qualification of the sale of securities becomes effective; and an applicant shall promptly supply by amendment prior to the effectiveness of such qualification any information based on facts occurring after the original date of filing which is necessary to supplement or correct the information contained in the original application so as to make such information not materially misleading as of the effective date of such qualification. (Added by Stats. 1968, Ch. 88.)
  73. 25161.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 6. General Provisions [25160 - 25166] ( Chapter 6 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    A filed document may be incorporated by reference in a later application or notice filing if it is still accurate and either was filed within four years before that filing or is otherwise available in the commissioner’s files.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 6. General Provisions [25160 - 25166] ( Chapter 6 added by Stats. 1968, Ch. 88. ) ## 25161. Any document filed under this law or a predecessor statute may be incorporated by reference in a subsequent application or notice filing if it was filed within four years prior to the filing of the application or notice filing, or is otherwise available in the files of the commissioner, to the extent that the document is currently accurate. (Amended by Stats. 1997, Ch. 391, Sec. 13. Effective January 1, 1998.)
  74. 25162.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 6. General Provisions [25160 - 25166] ( Chapter 6 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    If an amendment to a securities qualification application is filed after qualification takes effect and the commissioner approves it, the commissioner decides when it becomes effective.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 6. General Provisions [25160 - 25166] ( Chapter 6 added by Stats. 1968, Ch. 88. ) ## 25162. An amendment to an application filed after the effective date of the qualification of the sale of securities, if such amendment is approved by the commissioner, shall become effective on such date as the commissioner may determine, having due regard to the public interest and the protection of investors. (Added by Stats. 1968, Ch. 88.)
  75. 25163.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 6. General Provisions [25160 - 25166] ( Chapter 6 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    In any proceeding under this law, the person claiming an exemption or exception from a definition must prove it.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 6. General Provisions [25160 - 25166] ( Chapter 6 added by Stats. 1968, Ch. 88. ) ## 25163. In any proceeding under this law, the burden of proving an exemption or an exception from a definition is upon the person claiming it. (Added by Stats. 1968, Ch. 88.)
  76. 25164.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 6. General Provisions [25160 - 25166] ( Chapter 6 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    The commissioner must print a bold notice on each permit saying the permit is permissive only and is not an endorsement or recommendation. It is also unlawful to tell a prospective purchaser anything inconsistent with that statement.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 6. General Provisions [25160 - 25166] ( Chapter 6 added by Stats. 1968, Ch. 88. ) ## 25164. (a) Neither (1) the fact that an application for qualification under this law has been filed nor (2) the fact that such qualification has become effective constitutes a finding by the commissioner that any document filed under this law is true, complete, or not misleading. Neither any such fact nor the fact that a notice is filed or an exemption is available for a security or a transaction means that the commissioner has passed in any way upon the merits or qualifications of, or recommended or given approval to, any person, security or transaction (except as provided in Section 25142). (b) It is unlawful to make or cause to be made to any prospective purchaser any representation inconsistent with subdivision (a) of this section. (c) Every permit issued by the commissioner shall recite in bold type that the issuance thereof is permissive only and does not constitute a recommendation or endorsement of the securities permitted to be issued. (Amended by Stats. 1997, Ch. 391, Sec. 14. Effective January 1, 1998.)
  77. 25165.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 6. General Provisions [25160 - 25166] ( Chapter 6 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    Certain securities filers must submit an irrevocable consent letting the commissioner receive service of process.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 6. General Provisions [25160 - 25166] ( Chapter 6 added by Stats. 1968, Ch. 88. ) ## 25165. Every applicant for qualification of the sale of securities under this law or every person filing an application or a notice under Sections 25100.1, 25101.1, 25102.1, and 25230.1 or a request for or notice of an exemption from qualification (other than a California corporation, California limited partnership, California limited liability company, or a person licensed as a broker-dealer in this state) shall file with the commissioner, in such form as prescribed by rule, an irrevocable consent appointing the commissioner or his or her successor in office to be the applicant’s or person’s attorney to receive service of any lawful process in any noncriminal suit, action or proceeding against the applicant or person or the successor, executor or administrator thereof, which arises under this law or any rule or order hereunder after the consent has been filed, with the same force and validity as if served personally on the person filing the consent. A person who has filed such a consent in connection with a previous qualification under this law (or application for a permit under any prior law if the application under this law states that such consent is still effective), or in connection with a notice filing under Section 25100.1, 25101.1, 25102.1, and 25230.1, need not file another. Service may be made by leaving a copy of the process in the office of the commissioner but it is not effective unless (1) the plaintiff, who may be the commissioner in a suit, action or proceeding instituted by him or her, forthwith sends notice of the service and a copy of the process by registered or certified mail to the defendant or respondent at the last address on file with the commissioner, and (2) the plaintiff’s affidavit of compliance with this section is filed in the case on or before the return day of the process, if any, or within such further time as the court allows. (Amended by Stats. 2013, Ch. 335, Sec. 3. (SB 538) Effective January 1, 2014.)
  78. 25166.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 6. General Provisions [25160 - 25166] ( Chapter 6 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    A person must not willfully make a false material statement or willfully omit a required material fact in certain filings with the commissioner.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 2. QUALIFICATION OF AND FILING REQUIREMENTS FOR THE SALE OF SECURITIES [25100 - 25166] ( Heading of Part 2 amended by Stats. 1997, Ch. 391, Sec. 3. ) ## CHAPTER 6. General Provisions [25160 - 25166] ( Chapter 6 added by Stats. 1968, Ch. 88. ) ## 25166. It is unlawful for any person willfully to make any untrue statement of a material fact in any application, notice, or report filed with the commissioner under this part or pursuant to subdivision (b) of Section 25507, or willfully to omit to state in any such application, notice, or report any material fact which is required to be stated therein. (Amended by Stats. 1974, Ch. 1103.)
  79. 2517.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. )

    Verify source ↗

    This section defines “surviving social purpose corporation” as a social purpose corporation that results from merging one or more other corporations or business entities into it.

    ## Corporations Code - CORP ## TITLE 1. CORPORATIONS [100 - 14707] ( Title 1 enacted by Stats. 1947, Ch. 1038. ) ## DIVISION 1.5. SOCIAL PURPOSE CORPORATIONS ACT [2500 - 3503] ( Heading of Division 1.5 amended by Stats. 2014, Ch. 694, Sec. 12. ) ## CHAPTER 1. General Provisions and Definitions [2500 - 2517] ( Chapter 1 added by Stats. 2011, Ch. 740, Sec. 12. ) ## 2517. “Surviving social purpose corporation” means a social purpose corporation into which one or more other corporations or one or more other business entities is merged. (Amended by Stats. 2014, Ch. 694, Sec. 34. (SB 1301) Effective January 1, 2015.)
  80. 25200.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 1. Exemptions [25200 - 25209] ( Chapter 1 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    Certain registered broker-dealers are exempt from Section 25210 if they have no California office and keep their offers within the stated customer and recipient limits.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 1. Exemptions [25200 - 25209] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25200. A broker-dealer registered under the Securities Exchange Act of 1934, who has not previously had any certificate denied or revoked under this law or any predecessor statute, shall be exempted from the provisions of Section 25210 if he has no place of business in this state and he does not direct offers to sell or buy into this state in any manner to persons other than broker-dealers, banks, savings and loan associations, trust companies, insurance companies, investment companies registered under the Investment Company Act of 1940, pension or profit-sharing trusts (other than self-employed individual retirement plans), or other institutional investors or governmental agencies or instrumentalities designated by rule of the commissioner, or to more than 15 other customers (whether or not self-employed individual retirement plans) having an existing account with such broker-dealer prior to any offer made to them in this state, during any period of 12 consecutive months, whether or not the offeror or any of the offerees is then present in this state. (Amended by Stats. 1978, Ch. 663.)
  81. 25202.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 1. Exemptions [25200 - 25209] ( Chapter 1 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    An investment adviser is exempt from Section 25230 if it has no place of business in the state and had fewer than six California-resident clients in the last 12 months.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 1. Exemptions [25200 - 25209] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25202. (a) An investment adviser shall not be subject to Section 25230 if (1) the investment adviser does not have a place of business in this state and (2) during the preceding 12-month period has had fewer than six clients who are residents of this state. (b) For the purpose of this section only, “client” has the same meaning as the term “client” is defined by the Securities and Exchange Commission under the rule adopted pursuant to Section 222(d) of the Investment Advisers Act of 1940, as amended. Also, for the purpose of this section only, “client” does not mean other investment advisers, broker-dealers, banks, savings and loan associations, trust companies, insurance companies, investment companies registered under the Investment Company Act of 1940, pension and profit-sharing trusts (other than self-employed individual retirement plans), or other institutional investors or governmental agencies or instrumentalities designated by rule or order of the commissioner. (Amended by Stats. 1998, Ch. 48, Sec. 5. Effective January 1, 1999.)
  82. 25203.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 1. Exemptions [25200 - 25209] ( Chapter 1 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    A person whose only clients are insurance companies is exempt from Section 25230.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 1. Exemptions [25200 - 25209] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25203. A person whose only clients are insurance companies shall be exempted from the provisions of Section 25230. (Amended by Stats. 1997, Ch. 391, Sec. 19. Effective January 1, 1998.)
  83. 25204.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 1. Exemptions [25200 - 25209] ( Chapter 1 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    The commissioner may adopt rules to exempt specified classes of persons from Sections 25210 or 25230.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 1. Exemptions [25200 - 25209] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25204. The commissioner may by such rules as he deems necessary or appropriate in the public interest or for the protection of investors, either unconditionally or upon specified terms and conditions or for specified periods, exempt from the provisions of Section 25210 or Section 25230 any class of persons specified in such rules. (Added by Stats. 1968, Ch. 88.)
  84. 25206.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 1. Exemptions [25200 - 25209] ( Chapter 1 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    A broker licensed by the Real Estate Commissioner is exempt from Section 25210 when dealing in qualifying interests in certain non-corporate entities tied solely to real property investment or gain.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 1. Exemptions [25200 - 25209] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25206. A broker licensed by the Real Estate Commissioner is exempt from the provisions of Section 25210 when engaged in transactions in any interest in any general or limited partnership, joint venture, unincorporated association, or similar organization (but not a corporation) owned beneficially by no more than 100 persons and formed for the sole purpose of, and engaged solely in, investment in or gain from an interest in real property, including, but not limited to, a sale, exchange, trade, or development. An interest held by spouses shall be considered held by one person for the purposes of this section. (Amended by Stats. 2016, Ch. 50, Sec. 26. (SB 1005) Effective January 1, 2017.)
  85. 25206.1.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 1. Exemptions [25200 - 25209] ( Chapter 1 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    This section defines a “finder” and gives a Section 25210 exemption only if the finder meets specified filing, disclosure, compensation, and recordkeeping conditions.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 1. Exemptions [25200 - 25209] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25206.1. (a) For purposes of this section, a “finder” is a natural person who, for direct or indirect compensation, introduces or refers one or more accredited investors, as that term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933 (17 C.F.R. 230.501(a)), to an issuer or an issuer to one or more accredited investors, solely for the purpose of a potential offer or sale of securities of the issuer in an issuer transaction in this state, and who does not do any of the following: (1) Provide services to an issuer for a transaction or a series of related transactions for the offer or sale of securities of the issuer that exceeds a securities purchase price of fifteen million dollars ($15,000,000) in the aggregate. (2) Participate in negotiating any of the terms of the offer or sale of the securities. (3) Advise any party to the transaction regarding the value of the securities or the advisability of investing in, purchasing, or selling the securities. (4) Conduct any due diligence on the part of any party to the transaction. (5) Sell or offer for sale in connection with the issuer transaction any securities of the issuer that are owned, directly or indirectly, by the finder. (6) Receive, directly or indirectly, possession or custody of any funds in connection with the issuer transaction. (7) Knowingly receive compensation in connection with any offer or sale of securities unless the sale is qualified under this division or unless the security or the transaction is exempt or not otherwise subject to qualification. (8) Make any disclosure to a potential purchaser other than the following: (A) The name, address, and contact information of the issuer. (B) The name, type, price, and aggregate amount of any securities being offered in the issuer transaction. (C) The issuer’s industry, location, and years in business. (b) A finder who satisfies all of the conditions set forth in subdivisions (c) to (f), inclusive, shall be exempt from the provisions of Section 25210. (c) (1) The finder shall file with the commissioner before engaging in any activities described in subdivision (a), on a form prescribed by the commissioner, an initial statement of information that shall include both of the following: (A) The name and complete business or residential address of the finder. (B) The mailing address of the finder, if different from the business or residential address. (2) A filing fee of three hundred dollars ($300) shall be submitted to the Department of Financial Protection and Innovation along with the initial statement of information required by this subdivision. (d) (1) In addition, the finder shall file with the commissioner within 30 days of the anniversary of the finder’s initial statement of information required by subdivision (c), and annually thereafter, on a form prescribed by the commissioner, a renewal statement of information that includes all of the following: (A) The following affirmative representations by the finder: (i) The finder has complied and will continue to comply with the conditions of subdivision (a). (ii) The finder has not performed any acts or satisfied any circumstances prohibited by Section 25212 or by Rule 506(d) of Regulation D under the Securities Act of 1933 (17 C.F.R. 230.506(d)), and the finder has not been sanctioned by the commissioner pursuant to Section 25212. (iii) The finder has obtained the written agreement described in subdivision (e) with respect to each transaction in which the finder has participated in the prior 12 months. (B) An indication by the finder as to whether the finder has received transaction-based compensation that is subject to the actual sale of securities by the issuer in any transaction in which the finder has participated in the prior 12 months. (2) A filing fee in the amount of two hundred seventy-five dollars ($275) shall accompany each renewal statement of information. (e) (1) Concurrently with each introduction, the finder shall obtain the informed, written consent of each person introduced or referred by the finder to an issuer, in a written agreement signed by the finder, the issuer, and the person introduced or referred, disclosing the following: (A) The type and amount of compensation that has been or will be paid to the finder in connection with the introduction or referral and the conditions for payment of that compensation. (B) That the finder is not providing advice to the issuer or any person introduced or referred by the finder to an issuer as to the value of the securities or as to the advisability of investing in, purchasing, or selling the securities. (C) Whether the finder is also an owner, directly or indirectly, of the securities being offered or sold. (D) Any actual and potential conflict of interest in connection with the finder’s activities related to the issuer transaction. (E) That the parties to the agreement shall have the right to pursue any available remedies at law or otherwise for any breach of the agreement. (2) To satisfy the requirements of this subdivision, the agreement shall also include a representation by the person introduced or referred by the finder to the issuer that the person is an accredited investor, as that term is defined in Rule 501(a) of Regulation D under the Securities Exchange Act of 1933 (17 C.F.R. 230.501(a)), and that the person knowingly consents to the payment of the compensation described therein. (f) The finder shall maintain and preserve, for a period of five years from the date of filing of the notice prescribed in subdivision (d), a copy of the notice, the written agreement required in subdivision (e), and all other records relating to any offer or sale of securities in connection with which the finder receives compensation, as the commissioner may by rule require. The finder, upon written request of the commissioner, shall furnish to the commissioner any records required to be maintained and preserved under this subdivision. (g) (1) A natural person who is engaged in the business of effecting transactions in securities and is not otherwise exempt from Section 25210 shall be subject to the requirements of Section 25210, if the individual fails to meet the definition of “finder” set forth in subdivision (a), or does not satisfy all the conditions set forth in subdivisions (c) to (f), inclusive. (2) In the event a natural person does not meet the definition of “finder” set forth in subdivision (a) or does not satisfy all the conditions set forth in subdivisions (c) to (f), inclusive, any person introduced or referred by that natural person to an issuer, who purchases securities of that issuer in an issuer transaction following that introduction or referral, shall have the right to pursue any applicable remedy afforded under state law, including, without limitation, any applicable remedies pursuant to Section 25501.5. (h) The commissioner may from time to time make, amend, and rescind such rules, forms, and orders as are necessary to carry out the provisions of this section, including rules and forms governing applications and reports, and defining any terms, whether or not used in this law, insofar as the definitions are not inconsistent with the provisions of this law. For the purpose of rules and forms, the commissioner may classify securities, persons, and matters within their jurisdiction, and may prescribe different requirements for different classes. (Amended by Stats. 2022, Ch. 452, Sec. 73. (SB 1498) Effective January 1, 2023.)
  86. 25207.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 1. Exemptions [25200 - 25209] ( Chapter 1 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    A financial institution doing certain investment-company activities is exempt from Sections 25210 and 25230 for those activities, but remains subject to specified other sections and any rules the commissioner sets.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 1. Exemptions [25200 - 25209] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25207. A financial institution that undertakes activities with respect to an investment company pursuant to the provisions of Section 1514, 6524, 14652.5, or 18022.5 of the Financial Code shall not be subject to Section 25210 or 25230 in connection with such activities but shall be subject to Sections 25218, 25234, 25235, and 25237 and to subdivisions (a), (b), and (d) of Section 25216, and such rules thereunder as the commissioner may specify by rule. Nothing in this section shall affect the status of such a financial institution as a broker-dealer or investment adviser, or the employees of such persons, when engaged in the activities authorized by the provisions of the Financial Code specified above. (Amended by Stats. 2015, Ch. 190, Sec. 15. (AB 1517) Effective January 1, 2016.)
  87. 25208.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 1. Exemptions [25200 - 25209] ( Chapter 1 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    A licensed capital access company is exempt from Section 25210 when it is doing business under the Capital Access Company Law and its regulations.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 1. Exemptions [25200 - 25209] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25208. A person licensed as a capital access company under Division 3 (commencing with Section 28000) of Title 4 is exempt from the provisions of Section 25210 when engaged in the transaction of business pursuant to the requirements of the Capital Access Company Law and the regulations promulgated thereunder. (Added by Stats. 1998, Ch. 668, Sec. 2. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)
  88. 25209.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 1. Exemptions [25200 - 25209] ( Chapter 1 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    Section 25210 does not apply to an agent of an issuer in certain exempt transactions if the agent is a licensed life agent.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 1. Exemptions [25200 - 25209] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25209. Section 25210 shall not apply to an agent of an issuer when engaged in transactions exempted by subdivision (q) of Section 25102, provided that the agent is a life agent licensed in California or in the state of domicile of the purchaser. (Added by Stats. 2000, Ch. 705, Sec. 5. Effective January 1, 2001.)
  89. 25210.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    Broker-dealers generally may not trade or solicit securities in this state unless they first get a current certificate from the commissioner; persons acting for a broker-dealer or issuer must also follow commissioner rules on agent qualification and employment.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25210. (a) Unless exempted under the provisions of Chapter 1 (commencing with Section 25200) of this part, no broker-dealer shall effect any transaction in, or induce or attempt to induce the purchase or sale of, any security in this state unless the broker-dealer has first applied for and secured from the commissioner a certificate, then in effect, authorizing that person to act in that capacity. (b) No person shall, on behalf of a broker-dealer licensed pursuant to Section 25211, or on behalf of an issuer, effect any transaction in, or induce or attempt to induce the purchase or sale of, any security in this state unless that broker-dealer and agent have complied with any rules as the commissioner may adopt for the qualification and employment of those agents. (c) The commissioner shall, consistent with Section 25213, review the disciplinary histories of agents upon the filing of notice of (1) the employment or transfer of an agent for a broker-dealer, (2) an amendment to the information filed by the agent at the time of employment or transfer, and (3) the termination of employment of the agent from the broker-dealer. (Amended by Stats. 1998, Ch. 769, Sec. 2. Effective January 1, 1999.)
  90. 25211.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    Broker-dealer certificate applications must include required consent and information, and certain notification-licensed broker-dealers must update filings or risk losing that licensing path.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25211. (a) The application for a certificate as a broker-dealer shall be accompanied by the consent to service of process specified in Section 25240 and, unless filed pursuant to subdivision (b), shall contain such information in such detail relating to the applicant and any persons associated with the applicant as the commissioner may by rule require. (b) A broker-dealer registered under the Securities Exchange Act of 1934 who is a member of the New York Stock Exchange, the NYSE American, the NYSE Arca, or the Financial Industry Regulatory Authority, and who has not had any certificate as a broker-dealer, investment adviser or agent denied or revoked under this law or any predecessor statute, may be licensed by notification pursuant to this subdivision by filing with the commissioner an application setting forth the following information in such form and detail as the commissioner may by rule require: (1) Such information as is necessary to identify the broker-dealer and its offices in this state, and the location of its records and principal office. (2) Such information as is necessary to establish that the broker-dealer meets the requirements for licensure by notification under this subdivision. (3) The consent to service of process specified in Section 25240. (4) Such information as the commissioner may require as to the jurisdictions in which the broker-dealer is licensed or registered and as to the nature of the business conducted by the broker-dealer. (c) Unless a proceeding has been instituted under Section 25212, a certificate under subdivision (b) shall become effective on the third business day after the application is filed with the commissioner or upon the day the certificate is issued, whichever first occurs. However, the commissioner may by order delay effectiveness for a period not exceeding 15 business days (or for an additional period with the consent of the applicant) if the commissioner believes that the delay is necessary in the public interest to determine if a proceeding should be instituted under Section 25212. The commissioner may by rule or order waive that provision of subdivision (b) which precludes application thereunder by a person who has had a certificate denied or revoked under this law or any predecessor statute if the commissioner finds the waiver to be in the public interest. The commissioner, after appropriate notice and opportunity for hearing in accordance with the provisions of the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), may by rule or order disqualify a self-regulatory organization specified in subdivision (b) from the provisions thereof. The commissioner may by rule establish standards or criteria pursuant to which disqualification may be made and the commissioner may disqualify upon a finding that the self-regulatory organization fails substantially to comply with those standards or criteria. Disqualification by the commissioner shall not affect a certificate which has become effective pursuant to this subdivision before the effective date of that rule or order of disqualification but each person licensed pursuant to subdivision (b) upon the basis of membership in that organization shall, within 90 days after the effective date of that rule or order, or such additional time as the commissioner may allow, file with the commissioner a complete and current application in the form required pursuant to subdivision (a). If a broker-dealer licensed pursuant to subdivision (b) ceases to meet the qualifications for licensing pursuant to that subdivision, they shall, within 10 days after that event, file with the commissioner a complete and current application in the form required pursuant to subdivision (a). (d) An application for a certificate as a broker-dealer, with respect to a broker-dealer to be formed or organized, may be made by a licensed broker-dealer to which the broker-dealer to be formed or organized is to be the successor. The application shall contain such information in such detail relating to the applicant and to the successor and any person associated with the applicant or the successor as the commissioner may by rule require. The application shall become effective and the successor may transact business as a broker-dealer 30 days after the receipt of the application by the commissioner or within such shorter period of time as the commissioner may determine, unless an order has been entered under Section 25212 denying a certificate to the successor or a proceeding looking toward an order has been instituted under that section. The certificate shall terminate on the 45th day after the effective date thereof, unless prior thereto the successor shall, in accordance with such rules as the commissioner may prescribe, adopt the application as its own and file the consent to service of process specified in Section 25240. (Amended by Stats. 2022, Ch. 617, Sec. 130. (SB 1202) Effective January 1, 2023.)
  91. 25211.5.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    A broker-dealer acting under a currently effective certificate issued under Section 25211 is exempt from the State Constitution’s usury provisions.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25211.5. A broker-dealer acting pursuant to a certificate which is then in effect and which is issued pursuant to Section 25211, shall be exempt from the usury provisions of the State Constitution. This section creates and authorizes a class of persons pursuant to Section 1 of Article XV of the Constitution. (Added by Stats. 1983, Ch. 859, Sec. 2. Effective September 16, 1983.)
  92. 25212.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    The commissioner may, after notice and a hearing, censure, deny, suspend, or revoke a broker-dealer’s certificate if doing so is in the public interest and certain misconduct is found.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25212. The commissioner may, after appropriate notice and opportunity for hearing, by order censure, deny a certificate to, suspend for a period not exceeding 12 months or revoke the certificate of, any broker-dealer if the commissioner finds that the censure, denial, suspension, or revocation is in the public interest and that the broker-dealer, whether prior or subsequent to becoming a broker-dealer, or any partner, officer, director, or branch manager of the broker-dealer, whether prior or subsequent to becoming associated with the broker-dealer, or any person directly or indirectly controlling the broker-dealer, whether prior or subsequent to becoming such, or any agent employed by the broker-dealer while so employed has done any of the following: (a) Has willfully made or caused to be made in any application for a certificate or in any report required to be filed with the commissioner under this law, or in any proceeding before the commissioner, any statement which was at the time and in the light of the circumstances under which it was made false or misleading with respect to any material fact, or has willfully omitted to state in the application or report any material fact which is required to be stated therein. (b) Has been either (1) convicted of or has pled nolo contendere to a felony or misdemeanor, or (2) held liable in a civil action by final judgment of a court based upon conduct showing moral turpitude, and the commissioner finds that the felony, misdemeanor, or civil action (A) involved the purchase or sale of any security, (B) arose out of the conduct of the business of a broker-dealer or investment adviser, (C) involved theft, or (D) involved the violation of Section 1341, 1342, or 1343 of Title 18 of the United States Code. (c) Is permanently or temporarily enjoined by order, judgment, or decree of any court of competent jurisdiction from acting as an investment adviser, underwriter, or broker-dealer, or as an affiliated person or employee of any investment company, bank, or insurance company, or from engaging in or continuing any conduct or practice in connection with that activity or in connection with the purchase or sale of any security. (d) Is or has been subject to (1) any order of the Securities and Exchange Commission or the securities administrator of any other state denying registration to, or revoking or suspending the registration of, the person as a broker, dealer, agent, or investment adviser, (2) any order of any national securities association or national securities exchange (registered under the Securities Exchange Act of 1934) suspending or expelling that person from membership in the association or exchange or from association with any member thereof, or (3) any other order of the commission or any administrator, association, or exchange referred to in this subdivision which is or has been necessary for the protection of any investor. (e) Has willfully violated any provision of the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, the Investment Company Act of 1940, the Commodity Exchange Act, or Title 4 (commencing with Section 25000), including the Franchise Investment Law, Division 5 (commencing with Section 31000), or the California Commodity Law of 1990, Division 4.5 (commencing with Section 29500), or of any rule or regulation under any of those statutes, or any order of the commissioner which is or has been necessary for the protection of any investor. (f) Is or has been subject to (1) any order of the Commodity Futures Trading Commission denying registration to, or revoking or suspending the registration of, that person under the Commodity Exchange Act, (2) any order of any board of trade or commodity exchange, including, but not limited to, the New York Mercantile Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade, or the Chicago Board Options Exchange, suspending or expelling that person from membership in the board of trade or commodity exchange or from association with any member thereof, or (3) any other order of the commission or any board or exchange referred to in this subdivision which is or has been necessary for the protection of any investor. (g) Has willfully aided, abetted, counseled, commanded, induced, or procured the violation by any other person of any of the statutes or rules or regulations referred to in subdivision (e) above, or has failed reasonably to supervise, with a view to preventing violations of those statutes, rules and regulations, another person who commits a violation, if the other person is subject to his or her supervision; for the purposes of this subdivision, no person shall be deemed to have failed reasonably to supervise any person if (1) there have been established procedures, and a system for applying those procedures, which would reasonably be expected to prevent and detect, insofar as practicable, any violation by the other person, and (2) that person has reasonably discharged the duties and obligations incumbent upon him or her by reason of those procedures and system without reasonable cause to believe that those procedures and system were not being complied with. (h) Is subject to any currently effective order of the commissioner entered pursuant to Section 25213 revoking or suspending the certificate of the person as an agent. (i) Has violated any provision of this division or the rules thereunder or, in the case of an applicant only, any similar regulatory scheme of the State of California or a foreign jurisdiction. (Amended by Stats. 2003, Ch. 473, Sec. 2. Effective January 1, 2004.)
  93. 25212.1.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    The commissioner may immediately revoke a broker-dealer’s certificate if the broker-dealer does not comply with a currently effective commissioner order needed to protect an investor.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25212.1. The commissioner may immediately revoke by order the certificate of any broker-dealer if the broker-dealer fails to comply with any currently effective order of the commissioner which is necessary for the protection of any investor, unless the broker-dealer secures a court order restraining the enforcement of the commissioner’s revocation order within 10 days of the date the order is issued. (Amended by Stats. 2002, Ch. 772, Sec. 2. Effective January 1, 2003.)
  94. 25213.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    The commissioner may discipline certain broker-dealer or investment adviser personnel by censure, suspension, denial, or bar after notice and a hearing, if statutory conditions are met.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25213. The commissioner may, after appropriate notice and opportunity for hearing, by order censure, or suspend for a period not exceeding 12 months, or deny or bar from any position of employment, management or control of any broker-dealer or investment adviser, any officer, director, partner, agent, employee of, or person performing similar functions for, a broker-dealer, or any other person, if the commissioner finds that the censure, suspension, denial, or bar is in the public interest and that the person has committed any act or omission enumerated in subdivision (a), (e), (f), or (g) of Section 25212 or has been convicted of, or pled nolo contendere to, any offense or been held liable in any civil action specified in subdivision (b) of Section 25212, or is enjoined from any act, conduct or practice specified in subdivision (c) of Section 25212 or is subject to any order specified in subdivision (d) of Section 25212. (Amended by Stats. 2002, Ch. 772, Sec. 3. Effective January 1, 2003.)
  95. 25213.3.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. )

    Verify source ↗

    The commissioner may suspend for up to 12 months or bar certain broker-dealer personnel from employment, management, or control if they were convicted of, or pleaded nolo contendere to, a Section 25541 felony or misdemeanor committed on or after January 1, 1989.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25213.3. The commissioner shall, after appropriate notices and opportunity for hearing, by order suspend, for a period not exceeding 12 months, or bar from any position of employment, management or control of any broker-dealer, any officer, director, partner, agent, employee of, or person performing similar functions for, a broker-dealer, or any other person, if the person has been convicted of, or has pleaded nolo contendere to, a felony or misdemeanor in violation of Section 25541 that was committed on or after January 1, 1989. (Amended by Stats. 2002, Ch. 772, Sec. 4. Effective January 1, 2003.)
  96. 25214.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    A person covered by a suspension or bar order may not work for a broker-dealer or investment adviser against the order’s terms without the commissioner’s consent, and a broker-dealer may not let such a person work there if it knew or should have known about the order.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25214. (a) It is unlawful for any person, as to whom an order suspending or barring employment or control is in effect pursuant to Section 25213 or 25213.3, willfully to become or to be employed by any broker-dealer or investment adviser, contrary to the terms of that order, without the consent of the commissioner; and it is unlawful for any broker-dealer to permit a person as to whom an order is in effect pursuant to Section 25213, 25213.3, or 25232.1 to become or to remain a person employed by the broker-dealer, contrary to the terms of that order, without the consent of the commissioner, if the broker-dealer knew, or in the exercise of reasonable care should have known, of the order. (b) Any person as to whom an order suspending or barring employment or control is issued pursuant to Section 25213 or 25213.3 may petition the commissioner for reinstatement or reduction of penalty, or for modification of the order, as provided in and subject to the provisions of Section 11522 of the Government Code. The commissioner may, at any time and with the consent of that person without hearing, modify such order. (Amended by Stats. 1988, Ch. 1339, Sec. 2.)
  97. 25215.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    The commissioner may not enter certain orders without notice, and requested hearings must generally start within 15 business days.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25215. No order may be entered under Section 25212, 25213, 25213.3, or 25252 except after notice to any person affected thereby (and, in the case of an agent, to his or her employer or prospective employer if known to the commissioner) of the intention of the commissioner to enter that order and of the reasons therefor and that upon receipt of a request the matter will be set down for hearing to commence within 15 business days after that receipt unless the person affected consents to a later date. If no hearing is requested within 30 days after the mailing of the notice and none is ordered by the commissioner, the order may be entered without hearing to remain in effect until it is modified or vacated by the commissioner. In the case of an original application for a certificate, that hearing shall be set down to commence within 15 business days after receipt of a written request by the applicant made 30 days or more after the filing of the application, even though no notice by the commissioner has been given, unless the applicant consents to a later date. If a hearing is requested or ordered, it shall be held in accordance with the provisions of the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and the commissioner shall have all of the powers granted thereunder. (Amended by Stats. 1998, Ch. 391, Sec. 1. Effective January 1, 1999.)
  98. 25216.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    Broker-dealers and agents are prohibited from using fraudulent or manipulative practices in securities transactions in this state, and the commissioner may make rules and require a surety bond from certain issuers.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25216. (a) No broker-dealer or agent shall effect any transaction in, or induce or attempt to induce the purchase or sale of, any security in this state by means of any manipulative, deceptive or other fraudulent scheme, device, or contrivance. The commissioner shall, for the purposes of this subdivision, by rule define such schemes, devices or contrivances as are manipulative, deceptive, or otherwise fraudulent. (b) No broker-dealer or agent shall effect any transaction in, or induce or attempt to induce the purchase or sale of, any security in this state in connection with which such broker-dealer or agent engages in any fraudulent, deceptive or manipulative act or practice or makes any fictitious quotation. The commissioner shall, for the purposes of this subdivision, by rule define and prescribe means reasonably designed to prevent such acts and practices as are fraudulent, deceptive, or manipulative and such quotations as are fictitious. (c) No broker-dealer or agent shall effect any transaction in, or induce or attempt to induce the purchase or sale of, any security in this state in contravention of such rules as the commissioner may prescribe as necessary or appropriate in the public interest or for the protection of investors to provide safeguards with respect to the financial responsibility of broker-dealers. Subject to the limitations of Section 15(h) of the Securities Exchange Act of 1934, those rules may require a minimum capital for broker-dealers or prescribe a ratio between net capital and aggregate indebtedness or both and a fidelity bond. (d) No broker-dealer or agent shall effect or attempt to effect in this state, in contravention of such rules as the commissioner may prescribe as necessary or appropriate in the public interest or for the protection of investors, (1) any transaction in connection with any security whereby any party to such transaction acquires any put, call, straddle, or other option or privilege (A) of buying or selling the security, (B) on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the market value thereof), (C) entered into on a national securities exchange relating to foreign currency, or (2) any transaction in connection with any security with relation to which the broker-dealer or agent has, directly or indirectly, any interest in any such put, call, straddle, option, or privilege, or (3) any transaction in any security for the account of any person who the broker-dealer or agent has reason to believe has, and who actually has, directly or indirectly, any interest in any such put, call, straddle, option, or privilege with relation to such security. (e) The commissioner may by rule require any issuer who employs agents in connection with any security or transaction not exempted by Chapter 1 (commencing with Section 25100) of Part 2 of this division to post a surety bond in an amount not exceeding ten thousand dollars ($10,000), conditioned that the issuer will comply with the provisions of this law and the rules and orders issued thereunder. The bond, unless previously canceled, shall cover for the entire period that the qualification is in effect. If a deposit in lieu of a bond is made pursuant to Article 7 (commencing with Section 995.710) of Chapter 2 of Title 14 of Part 2 of the Code of Civil Procedure, the deposit may include an appropriate deposit of securities. No suit may be maintained to enforce any liability on the bond unless brought within two years after the contract of sale or other act upon which the suit is based. (Amended by Stats. 1997, Ch. 391, Sec. 20. Effective January 1, 1998.)
  99. 25217.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    A licensed broker-dealer may not complete or solicit securities transactions in California unless it and its agents meet the commissioner’s required standards.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25217. (a) A broker-dealer licensed under this chapter shall not effect any transaction in, or induce or attempt to induce the purchase or sale of, any security in this state unless that broker-dealer and all agents employed by that broker-dealer meet specified and appropriate standards with respect to training, experience, supervision, terms of employment, and other qualifications as the commissioner finds necessary or desirable. The commissioner may establish those standards by rules, which may: (1) appropriately classify broker-dealers and agents (taking into account relevant matters, including types of business done and nature of securities sold); (2) specify that all or any portion of those standards shall be applicable to any class; (3) require persons in any class to pass examinations prescribed in accordance with those rules; and (4) provide that persons in any class, other than a broker-dealer and partners, officers and supervisory employees (which term may be defined by the commissioner’s rules and as so defined shall include branch managers of broker-dealers) of broker-dealers, may be qualified solely on the basis of compliance with such specified standards of training and such other qualifications as the commissioner finds appropriate. (b) In addition to the fees imposed by Section 25608, the commissioner may prescribe by rule reasonable fees and charges to defray the cost of any examination administered by the commissioner or under the commissioner’s direction. The commissioner may cooperate with national securities associations and national securities exchanges and with the Securities and Exchange Commission in administering examinations and may require broker-dealers and agents to pass examinations administered by or on behalf of any association or exchange or by the Securities and Exchange Commission and to pay to that association or exchange or that commission reasonable fees or charges to defray the costs incurred by that association or exchange or commission in administering the examinations. (Amended by Stats. 2019, Ch. 143, Sec. 48. (SB 251) Effective January 1, 2020.)
  100. 25218.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    A licensed broker-dealer may not carry out or solicit securities transactions in California that violate commissioner-prescribed rules.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25218. No broker-dealer licensed under this chapter shall effect any transaction in, or induce or attempt to induce the purchase or sale of, any security in this state in contravention of such rules as the commissioner may prescribe designed to promote just and equitable principles of trade, to provide safeguards against unreasonable profits or unreasonable rates of commissions or other charges, and in general to protect investors and the public interest, and to remove impediments to and perfect the mechanism of a free and open market. (Amended by Stats. 1979, Ch. 665.)
  101. 25219.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    The commissioner may suspend certain securities trading for up to 90 days at a time if public interest and investor protection require it. During a suspension, broker-dealers and agents generally may not trade or solicit trades in the suspended security in this state, subject to stated exceptions.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25219. Notwithstanding any other provision of this division, if in his or her opinion the public interest and the protection of investors so require, the commissioner is authorized summarily to suspend all over-the-counter trading in this state by broker-dealers and agents in any security or summarily to suspend all trading on a national securities exchange located in this state in any security (provided, in the case of trading on that exchange, that the security is not listed on any national securities exchange located outside this state on which trading has not been suspended) for a period not exceeding 90 days, and for successive periods of 90 days. No broker-dealer or agent shall effect any transaction (other than an unsolicited brokerage transaction effected on a national securities exchange located outside this state) in, or induce or attempt to induce the purchase or sale of, any security in this state in which trading is in any manner suspended under this section, except in performance of a contract previously entered into. (Amended by Stats. 2009, Ch. 131, Sec. 13. (AB 991) Effective January 1, 2010.)
  102. 25220.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    After a suspension order under Section 25219, an interested person may ask in writing for the suspension to be lifted, and the hearing must start within 15 business days unless the requester agrees to a later date.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25220. At any time after the issuance of an order under Section 25219, any interested person (including, but not limited to, the issuer of the security and any broker-dealer who has been making a market in the security) may in writing request that the suspension of trading be rescinded. Upon the receipt of such a written request, the matter shall be set down for hearing to commence within 15 business days after such receipt unless the person making the request consents to a later date. After such hearing, which shall be conducted in accordance with the provisions of the Administrative Procedure Act, Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and in connection with which the commissioner shall have all of the powers granted thereunder, the commissioner may order such suspension to be continued until modified or rescinded by further order of the commissioner if he finds that trading in the security will be unfair, unjust, or inequitable to investors or will tend to work a fraud upon the purchasers or sellers of such security. Otherwise, he shall rescind the suspension of trading and no further orders may be entered under Section 25219 with respect to the same security in the absence of changed circumstances justifying such order. (Amended by Stats. 1973, Ch. 390.)
  103. 25221.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    Licensed broker-dealers, their affiliates, and their officers or employees may send applicant fingerprints to the Department of Justice, and the Department must return specified conviction and arrest information.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 2. Licensing of Agents and Broker-Dealers [25210 - 25221] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25221. (a) Notwithstanding any other provision of law, a broker-dealer, or any affiliate thereof, licensed under this chapter, or any officer or employee thereof, may submit to the Department of Justice fingerprints of an applicant for employment for the purpose of obtaining information as to the existence and nature of a record of a conviction and of an arrest for which the Department of Justice establishes that the applicant was released on bail or on his or her own recognizance pending trial. Fingerprints taken pursuant to this section include fingerprints taken by the use of fingerprint live-scan technology, as described in Section 1596.871 of the Health and Safety Code. (b) The Department of Justice shall provide the following information to the broker-dealer, affiliate, or officer or employee thereof pursuant to subdivision (a): (1) Every conviction rendered against the applicant. (2) Every arrest for which the Department of Justice establishes that the applicant was released on bail or on his or her own recognizance pending trial. (Added by Stats. 2001, Ch. 547, Sec. 1. Effective January 1, 2002.)
  104. 25230.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. )

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    An investment adviser generally may not do business in this state unless it has a current commissioner-issued certificate or qualifies for an exception. People acting for the adviser also cannot perform certain advisory activities unless qualification rules adopted by the commissioner are followed.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. ) ## 25230. (a) It is unlawful for any investment adviser to conduct business as an investment adviser in this state unless the investment adviser has first applied for and secured from the commissioner a certificate, then in effect, authorizing the investment adviser to do so or unless the investment adviser is exempted by the provisions of Chapter 1 (commencing with Section 25200) of this part or unless the investment adviser is subject to Section 25230.1. (b) No person, on behalf of an investment adviser that has obtained a certificate pursuant to Section 25231, may, in this state: offer or negotiate for the sale of investment advisory services of the investment adviser; determine which recommendations shall be made to, make recommendations to, or manage the accounts of, clients of the investment adviser; or determine the reports or analyses concerning securities to be published by the investment adviser, unless the investment adviser and that person have complied with rules that the commissioner may adopt for the qualification and employment of those persons. (c) The commissioner may, consistent with Section 25232.1, review the disciplinary history of an investment adviser representative upon the filing of notice of any of the following: (1) The employment, association, or transfer of the investment adviser representative. (2) An amendment to the information filed by the investment adviser representative at the time of employment, association, or transfer. (3) The termination of employment or association of the investment adviser representative. (Amended by Stats. 2003, Ch. 473, Sec. 3. Effective January 1, 2004.)
  105. 25230.1.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. )

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    Some registered investment advisers are exempt from the Section 25230 certificate requirement, but they must file an annual notice and pay the required fee if subject to subdivision (a). Investment adviser representatives with a place of business in the state may also need a certificate, and certain representative activities are restricted unless commissioner rules are followed.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. ) ## 25230.1. (a) A person that is registered under Section 203 of the Investment Advisers Act of 1940 as an investment adviser is not subject to the requirement of obtaining a certificate under Section 25230, but may not conduct business in this state unless the person has fewer than six clients as specified in Section 25202 or unless the person first complies with subdivision (b). An investment adviser representative that has a place of business in this state may be required to obtain a certificate pursuant to Section 25231. (b) A person subject to subdivision (a) shall: (1) File with the commissioner an annual notice, consisting of those documents filed with the Securities and Exchange Commission pursuant to the securities laws that the commissioner by rule or order deems appropriate or, in lieu thereof, a form prescribed by the commissioner, and a consent to service of process under Section 25240. (2) Pay the notice filing fee provided for in subdivision (d) of Section 25608.1. (c) No investment adviser representative, on behalf of an investment adviser subject to subdivision (a), may, in this state: offer or negotiate for the sale of investment advisory services of the investment adviser; determine which recommendations shall be made to, make recommendations to, or manage the accounts of, clients of the investment adviser; or determine the reports or analysis concerning securities to be published by the investment adviser, unless the investment adviser representative has complied with rules that the commissioner may adopt for the qualification and employment of investment adviser representatives. (d) Subdivision (a) does not prohibit the commissioner from investigating and bringing enforcement actions with respect to fraud or deceit, including and without limitation, fraud or deceit under Section 25235 and the rules of the commissioner adopted thereunder, against an investment adviser or an investment adviser representative. (Amended by Stats. 1998, Ch. 48, Sec. 6. Effective January 1, 1999.)
  106. 25231.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. )

    Verify source ↗

    Investment advisers, and people planning to become investment advisers, may apply for a certificate by filing an application with the commissioner.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. ) ## 25231. (a) Any investment adviser, or any person who contemplates becoming an investment adviser, may apply for a certificate to act as an investment adviser by filing with the commissioner an application. The application shall be accompanied by the consent to service of process specified in Section 25240 and shall contain information, in such form and detail, as the commissioner may by rule prescribe. (b) Unless otherwise provided by rule or order of the commissioner, all investment adviser and investment adviser representative applications, amendments, reports, notices, related filings, and fees required to be filed with the commissioner pursuant to this title shall be filed electronically with and transmitted to the Web-based Investment Adviser Registration Depository operated by the Financial Industry Regulatory Authority. (Amended by Stats. 2009, Ch. 131, Sec. 14. (AB 991) Effective January 1, 2010.)
  107. 25232.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. )

    Verify source ↗

    The commissioner may, after notice and a hearing, censure, deny, suspend, or revoke an investment adviser’s certificate if doing so is in the public interest and one of the listed misconduct grounds is met.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. ) ## 25232. The commissioner may, after appropriate notice and opportunity for hearing, by order censure, deny a certificate to, or suspend for a period not exceeding 12 months or revoke the certificate of, an investment adviser, if the commissioner finds that the censure, denial, suspension, or revocation is in the public interest and that the investment adviser, whether prior or subsequent to becoming such, or any partner, officer or director thereof or any person performing similar functions or any person directly or indirectly controlling the investment adviser, whether prior or subsequent to becoming such, or any employee of the investment adviser while so employed has done any of the following: (a) Has willfully made or caused to be made in any application for a certificate or any report filed with the commissioner under this division, or in any proceeding before the commissioner, any statement which was at the time and in the light of the circumstances under which it was made false or misleading with respect to any material fact, or has willfully omitted to state in the application or report any material fact which is required to be stated therein. (b) Has been either (1) convicted of or has pled nolo contendere to any felony or misdemeanor, or (2) held liable in a civil action by final judgment of a court based upon conduct showing moral turpitude, and the commissioner finds that the felony, misdemeanor or civil action (A) involved the purchase or sale of any security, (B) arose out of the conduct of the business of a broker-dealer or investment adviser, (C) involved theft, or (D) involved the violation of Section 1341, 1342, or 1343 of Title 18 of the United States Code. (c) Is permanently or temporarily enjoined by order, judgment, or decree of any court of competent jurisdiction from acting as an investment adviser, underwriter or broker-dealer or as an affiliated person or employee of any investment company, bank, or insurance company, or from engaging in or continuing any conduct or practice in connection with that activity, or in connection with the purchase or sale of any security. (d) Is or has been subject to (1) any order of the Securities and Exchange Commission or the securities administrator of any other state denying or revoking or suspending his or her registration as an investment adviser, or investment adviser representative, or as a broker or dealer or agent, (2) any order of any national securities association or national securities exchange (registered under the Securities Exchange Act of 1934) suspending or expelling him or her from membership in that association or exchange or from association with any member thereof, or (3) any other order of the commission or any administrator, association, or exchange referred to in this subdivision which is or has been necessary for the protection of any investor. (e) Has willfully violated any provision of the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, the Investment Company Act of 1940, the Commodity Exchange Act, or Title 4 (commencing with Section 25000), including the Franchise Investment Law, Division 5 (commencing with Section 31000), or the California Commodity Law of 1990, Division 4.5 (commencing with Section 29500), or of any rule or regulation under any of those statutes, or any order of the commissioner which is or has been necessary for the protection of any investor. (f) Is or has been subject to (1) any order of the Commodity Futures Trading Commission denying registration to, or revoking or suspending the registration of, that person under the Commodity Exchange Act, (2) any order of any board of trade or commodity exchange, including, but not limited to, the New York Mercantile Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade, or the Chicago Board Options Exchange, suspending or expelling that person from membership in the board of trade or commodity exchange or from association with any member thereof, or (3) any other order of the commission or any board or exchange referred to in this subdivision which is or has been necessary for the protection of any investor. (g) Has aided, abetted, counseled, commanded, induced, or procured the violation by any other person of any statute or rule or regulation referred to in subdivision (e). (h) Has violated any provision of this division or the rules thereunder or, in the case of an applicant only, any similar regulatory scheme of the State of California or a foreign jurisdiction. (Amended by Stats. 2003, Ch. 473, Sec. 4. Effective January 1, 2004.)
  108. 25232.1.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. )

    Verify source ↗

    The commissioner may, after notice and a hearing, censure, suspend for up to 12 months, or bar certain associated persons from working in specified roles for an investment adviser, broker-dealer, or commodity adviser.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. ) ## 25232.1. The commissioner may, after appropriate notice and opportunity for hearing, by order censure, or suspend for a period not exceeding 12 months, or bar from any position of employment, management or control of any investment adviser, broker-dealer or commodity adviser, any officer, director, partner, employee of, or person performing similar functions for, an investment adviser, or any other person, if he or she finds that the censure, suspension or bar is in the public interest and that the person has committed any act or omission enumerated in subdivision (a), (e), (f), or (g) of Section 25232 or has been convicted of any offense or held liable in any civil action specified in subdivision (b) of Section 25232 or is enjoined from any act, conduct or practice specified in subdivision (c) of Section 25232 or is subject to any order specified in subdivision (d) of Section 25232. (Amended by Stats. 2002, Ch. 772, Sec. 5. Effective January 1, 2003.)
  109. 25232.2.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. )

    Verify source ↗

    People under certain suspension or bar orders may not work for specified securities firms without the commissioner’s consent, and investment advisers may not employ such people without that consent.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. ) ## 25232.2. (a) It is unlawful for any person, as to whom an order suspending or revoking the person’s certificate as an investment adviser is in effect pursuant to Section 25232 or as to whom an order suspending or barring employment is in effect pursuant to Section 25232.1, willfully to become or to be employed by any investment adviser, broker-dealer or commodity adviser, without the consent of the commissioner, and it is unlawful for any investment adviser to permit a person as to whom an order is in effect pursuant to Section 25212.1 or 25232.1 to become or to remain employed by the investment adviser, without the consent of the commissioner, if such investment adviser knew, or in the exercise of reasonable care should have known, of such order. (b) Any person as to whom an order suspending or barring employment with or participation is issued pursuant to Section 25232.1 may petition the commissioner for reinstatement or reduction of penalty as provided in and subject to the provisions of Section 11522 of the Government Code. (Amended by Stats. 1981, Ch. 1120, Sec. 5. Effective October 2, 1981. Operative November 1, 1981, by Sec. 15 of Ch. 1120.)
  110. 25232.3.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. )

    Verify source ↗

    The commissioner may immediately revoke an investment adviser’s certificate if the adviser does not comply with a current commissioner order needed to protect an investor.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. ) ## 25232.3. The commissioner may immediately revoke the certificate of any investment adviser if the investment adviser fails to comply with any currently effective order of the commissioner which is necessary for the protection of any investor, unless the investment adviser secures a court order restraining the enforcement of the commissioner’s revocation order within 10 days of the date the order is issued. (Amended by Stats. 2002, Ch. 772, Sec. 6. Effective January 1, 2003.)
  111. 25233.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. )

    Verify source ↗

    The commissioner generally may not enter certain orders without first giving notice to the affected person, and hearings must be set within 15 business days when requested, unless the affected person or applicant agrees to a later date.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. ) ## 25233. No order may be entered under Section 25232, 25232.1, or 25252 except after notice to the person affected thereby of the intention of the commissioner to enter that order and of the reasons therefor and that upon receipt of a request the matter shall be set down for hearing to commence within 15 business days after that receipt unless the person affected consents to a later date. If no hearing is requested within 30 days after the mailing of that notice and none is ordered by the commissioner, the order may be entered without hearing to remain in effect until it is modified or vacated by the commissioner. In the case of an original application for a certificate, such a hearing shall be set down to commence within 15 business days after receipt of a written request by the applicant made 30 days or more after the filing of the application, even though no such notice by the commissioner has been given, unless the applicant consents to a later date. If a hearing is requested or ordered, it shall be held in accordance with the provisions of the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and the commissioner shall have all of the powers granted thereunder. (Amended by Stats. 1998, Ch. 391, Sec. 2. Effective January 1, 1999.)
  112. 25234.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. )

    Verify source ↗

    An investment adviser licensed under this chapter may not enter into, extend, renew, or perform an investment advisory contract that pays the adviser from client capital gains or appreciation, lacks a no-assignment-without-consent term, or lacks prompt partnership-change notice.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. ) ## 25234. (a) No investment adviser licensed under this chapter shall in this state enter into, extend or renew any investment advisory contract, or in any way perform any investment advisory contract entered into, extended or renewed on or after the effective date of this law, if that contract: (1) Provides for compensation to the investment adviser on the basis of a share of capital gains upon or capital appreciation of the funds or any portion of the funds of the client, except as may be permitted by rule or order of the commissioner; (2) Fails to provide, in substance, that no assignment of the contract shall be made by the investment adviser without the consent of the other party to the contract; (3) Fails to provide, in substance, that the investment adviser, if a partnership, will notify the other party to the contract of any change in the membership of the partnership within a reasonable time after the change. (b) As used in this section, “investment advisory contract” means any contract or agreement whereby a person agrees to act as investment adviser or to manage any investment or trading account for a person other than an investment company. Paragraph (1) of subdivision (a) of this section does not prohibit an investment advisory contract that provides for compensation based upon the total value of a fund averaged over a definite period, or as of definite dates, or taken as of a definite date. (Amended by Stats. 1997, Ch. 391, Sec. 24. Effective January 1, 1998.)
  113. 25235.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. )

    Verify source ↗

    An investment adviser must not defraud clients, use fraudulent or deceptive practices, make certain principal/client securities trades without written disclosure and consent, or use the title “investment counsel” unless the business meets the stated conditions.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. ) ## 25235. It is unlawful for any investment adviser, directly or indirectly, in this state: (a) To employ any device, scheme, or artifice to defraud any client or prospective client. (b) To engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon any client or prospective client. (c) Acting as principal for his own account, knowingly to sell any security to or purchase any security from a client for whom he is acting as investment adviser, or, acting as broker for a person other than such client, knowingly to effect any sale or purchase of any security for the account of such client, without disclosing to such client in writing before the completion of the transaction the capacity in which he is acting and obtaining the written consent of the client to such transaction. (d) To engage in any act, practice, or course of business which is fraudulent, deceptive, or manipulative. The commissioner shall, for the purpose of this subdivision, by rule define and prescribe means reasonably designed to prevent such acts, practices, and courses of business as are fraudulent, deceptive, or manipulative. (e) To represent that he is an investment counsel or to use the name “investment counsel” as descriptive of his business unless his principal business consists of acting as investment adviser and a substantial part of his business consists of rendering investment advisory services on the basis of the individual needs of his clients. (Added by Stats. 1968, Ch. 88.)
  114. 25236.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. )

    Verify source ↗

    An investment adviser licensed under this chapter may not do business in this state unless the adviser and associated natural persons meet standards set by the commissioner. The commissioner may also set standards, require exams, and prescribe reasonable fees and charges.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. ) ## 25236. (a) No investment adviser licensed under this chapter shall conduct any business as such investment adviser in this state unless the investment adviser and all natural persons associated with such investment adviser meet such specified and appropriate standards with respect to training, experience and other qualifications as the commissioner finds necessary or desirable. The commissioner may establish such standards by rule, which may (1) Appropriately classify investment advisers and persons associated with investment advisers; (2) Specify that all or any portion of such standards shall be applicable to any such class; and (3) Require persons in any such class to pass examinations prescribed in accordance with such rules. (b) In addition to the fees imposed by Section 25608, the commissioner may prescribe by rule reasonable fees and charges to defray the costs of carrying out this section, including, but not limited to, fees for any examination administered by him or under his direction. (Added by Stats. 1968, Ch. 88.)
  115. 25237.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. )

    Verify source ↗

    The commissioner must make rules for certain licensed investment advisers that hold client securities or funds or have client powers of attorney, and those rules may require minimum capital, a net-capital-to-indebtedness ratio, or a fidelity bond.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. ) ## 25237. The commissioner shall prescribe rules with respect to investment advisers licensed under this chapter who have custody of their clients’ securities or funds or who have any power of attorney from their clients to execute transactions as he or she finds to be necessary or appropriate in the public interest or for the protection of investors. The rules may require a minimum capital for those investment advisers or prescribe a minimum ratio between net capital and aggregate indebtedness or both, and may require a fidelity bond. (Amended by Stats. 1997, Ch. 391, Sec. 25. Effective January 1, 1998.)
  116. 25238.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. )

    Verify source ↗

    An investment adviser and an associated natural person must not conduct or try to conduct investment advisory activities in California in violation of commissioner rules.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 3. Licensing and Notice Filing Requirements of Investment Adviser Representatives and Investment Advisers [25230 - 25238] ( Heading of Chapter 3 amended by Stats. 1997, Ch. 391, Sec. 21. ) ## 25238. No investment adviser licensed under this chapter and no natural person associated with the investment adviser shall engage in investment advisory activities, or attempt to engage in investment advisory activities, in this state in contradiction of such rules as the commissioner may prescribe designed to promote fair, equitable and ethical principles. (Added by Stats. 1986, Ch. 698, Sec. 4.)
  117. 25240.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    Certain broker-dealer and investment adviser applicants must file an irrevocable consent with the commissioner to accept service of process; some people with a prior qualifying filing do not have to file again.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25240. Every applicant for a certificate as a broker-dealer or an investment adviser (other than a California corporation), and every investment adviser subject to Section 25230.1, shall file with the commissioner, in such form as the commissioner by rule prescribes, an irrevocable consent appointing the commissioner or the commissioner’s successor in office to be the person’s attorney to receive service of any lawful process in any noncriminal suit, action or proceeding against the person or the person’s successor, executor, or administrator, which arises under this law or any rule or order hereunder after the consent has been filed, with the same force and validity as if served personally on the person filing the consent. A person who has filed such a consent in connection with a previous application under this law (or under any prior law if the application states that such consent is still effective), or a person who has filed such a consent in connection with a previous notice filed under Section 25230.1, need not file another. Service may be made by leaving a copy of the process in the office of the commissioner, but it is not effective unless (1) the plaintiff, who may be the commissioner in a suit, action or proceeding instituted by the commissioner, forthwith sends notice of the service and a copy of the process by registered or certified mail to the defendant or respondent at the person’s last address on file with the commissioner, and (2) the plaintiff’s affidavit of compliance with this section is filed in the case on or before the return day of the process, if any, or within such further time as the court allows. (Amended by Stats. 1997, Ch. 391, Sec. 26. Effective January 1, 1998.)
  118. 25241.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    Broker-dealers and investment advisers must keep specified records, file required reports, preserve required records for the period set by rule, and provide an authorization for disclosure of financial records unless a rule says otherwise.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25241. (a) Every broker-dealer and every investment adviser licensed under Section 25230 shall make and keep accounts, correspondence, memorandums, papers, books, and other records and shall file financial and other reports as the commissioner by rule requires, subject to the limitations of Section 15(h) of the Securities Exchange Act of 1934 with respect to broker-dealers and Section 222 of the Investment Advisers Act of 1940 with respect to investment advisers. (b) All records so required shall be preserved for the time specified in the rule. (c) All records referred to in this section are subject at any time and from time to time to reasonable periodic, special, or other examinations by the commissioner, within or without this state, as the commissioner deems necessary or appropriate in the public interest or for the protection of investors. (d) For the purpose of avoiding unnecessary duplications of examinations, the commissioner, insofar as he or she deems it practicable in administering this section, may cooperate with the securities administrators of other states, the Securities and Exchange Commission and any national securities exchange or national securities association. (e) Unless otherwise provided by rule, every investment adviser subject to Section 25230 and every broker-dealer, including an applicant for a license under Section 25210 or 25230, shall furnish an authorization for disclosure to the commissioner of financial records of the licensee’s broker-dealer or investment adviser business pursuant to Section 7473 of the Government Code. (Amended by Stats. 2003, Ch. 473, Sec. 5. Effective January 1, 2004.)
  119. 25242.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    This section lets the commissioner control when a broker-dealer or investment adviser certificate surrender takes effect and allows summary revocation, suspension, or revocation of a certificate in listed situations.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25242. (a) Surrender of a certificate as a broker-dealer or investment adviser becomes effective 30 days after receipt of an application to surrender that certificate or within a shorter period of time as the commissioner may determine, unless a revocation or suspension proceeding is pending when the application is filed or a proceeding to revoke or suspend or to impose conditions upon the withdrawal is instituted within 30 days after the application is filed. If a proceeding is pending or instituted, withdrawal becomes effective at a time and upon any conditions as the commissioner by order determines. (b) If the commissioner finds that any broker-dealer or investment adviser is no longer in existence, or has ceased to do business as a broker-dealer or investment adviser, or is subject to an adjudication of mental incompetence or to the control of a committee or conservator or guardian, or cannot be located after reasonable search, the commissioner may by order summarily revoke the certificate of that broker-dealer or investment adviser. (c) The commissioner may summarily suspend or revoke the certificate of a broker-dealer or investment adviser if he or she (1) fails to pay any fee required by Section 25608 or imposed pursuant to Section 25217, 25218 or 25236 within 10 days after notice by the commissioner that the fee is due and unpaid, (2) fails to file any report required under Section 25241 within 10 days after notice by the commissioner that the report is due, (3) fails to maintain any bond required by subdivision (e) of Section 25216 or by Section 25237, (4) fails to file an application pursuant to subdivision (a) of Section 25211 when required by subdivision (c) of that section, within the time specified therein or within 10 days after notice by the commissioner that the application is required, whichever last occurs, (5) fails to maintain any capital required by subdivision (c) of Section 25216 or by Section 25237, or (6) fails to maintain records as required by Section 25241. (Amended by Stats. 1998, Ch. 391, Sec. 3. Effective January 1, 1999.)
  120. 25243.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    Certificate holders as broker-dealers or investment advisers must not say or imply they were sponsored, recommended, approved, or reviewed by the commissioner.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25243. It is unlawful for any person holding a certificate as a broker-dealer or investment adviser under this part to represent or imply in any manner whatsoever that such person has been sponsored, recommended, or approved or that the person’s abilities or qualifications have in any respect been passed upon by the commissioner. Nothing in this section prohibits a statement (other than in a paid advertisement) that a person holds a certificate under this law, if such statement is true in fact and if the effect of such licensing is not misrepresented. (Amended by Stats. 1981, Ch. 1120, Sec. 8. Effective October 2, 1981. Operative November 1, 1981, by Sec. 15 of Ch. 1120.)
  121. 25243.5.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    Broker-dealers, investment advisers, and their agents or representatives must not use senior-focused certifications or designations in a misleading way when offering or advising on securities.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25243.5. (a) A broker-dealer or investment adviser, or an agent or representative thereof, shall not use a senior-specific certification, credential, or professional designation in connection with the offer, sale, or purchase of securities, or the provision of advice as to the value of or the advisability of investing in, purchasing, or selling securities, either directly or indirectly or through publications or writings or by issuing or promulgating analyses or reports relating to securities, that indicates or implies that the broker-dealer, investment adviser, or an agent or representative thereof, has special certification or training in advising or servicing senior citizens or retirees, in such a way as to mislead any person. (b) The prohibited use of these certifications, credentials, or professional designations includes, but is not limited to, the following: (1) The use of a certification, credential, or professional designation by a person who has not actually earned or is otherwise ineligible to use the certification, credential, or designation. (2) The use of a nonexistent or self-conferred certification, credential, or professional designation. (3) The use of a certification, credential, or professional designation that indicates or implies a level of occupational qualifications obtained through education, training, or experience that the person using the certification, credential, or professional designation does not have. (4) The use of a certification, credential, or professional designation that was obtained from a designating, credentialing, or certifying organization where any of the following apply: (A) The organization is primarily engaged in the business of instruction in sales marketing. (B) The organization does not have reasonable standards or procedures for assuring the competency of individuals to whom it grants a certification, credential, or professional designation. (C) The organization does not have reasonable standards or procedures for monitoring and disciplining individuals with a certification, credential, or professional designation for improper or unethical conduct. (D) The organization does not have reasonable continuing education requirements for individuals with a certification, credential, or professional designation in order to maintain the certificate, credential, or professional designation. (c) There is a rebuttable presumption that a designating, credentialing, or certifying organization is not disqualified solely for the purposes of paragraph (4) of subdivision (b) when the organization has been accredited by the American National Standards Institute, the National Commission for Certifying Agencies, or an organization that is on the United States Department of Education’s list entitled “Accrediting Agencies Recognized for Title IV Purposes” and the certification, credential, or professional designation issued therefrom does not primarily apply to sales and/or marketing. (d) In determining whether a combination of words, or an acronym standing for a combination of words, constitutes a certification, credential, or professional designation indicating or implying that a person has special certification or training in advising or serving senior citizens or retirees, factors to be considered shall include both of the following: (1) Use of one or more word such as “senior,” “retirement,” “elder,” or like words combined with one or more words such as “certified,” “registered,” “chartered,” “adviser,” “specialist,” “consultant,” “planner,” or like words, in the name of the certification, credential, or professional designation or credential. (2) The manner in which those words are combined. (e) This section shall not apply to the use of a job title by a person within an organization that is licensed or registered by the Department of Financial Protection and Innovation or a federal financial services regulatory agency, when that job title indicates seniority or standing within the organization, or specifies a person’s area of specialization within the organization. For the purposes of this subdivision, federal financial services regulatory agency includes, but is not limited to, an agency that regulates brokers or dealers, investment advisers, or investment companies as described under the Investment Company Act of 1940 (15 U.S.C. Sec. 809-1 et seq.). (f) (1) This section shall not apply to a broker or agent who is licensed by the Department of Insurance and is in compliance with the requirements of Section 787.1 of the Insurance Code. (2) This subdivision shall be operative only if Assembly Bill 2150 of the 2007–08 Regular Session is chaptered and becomes effective and that bill adds Section 787.1 to the Insurance Code. (g) This section shall become operative on July 1, 2009. (Amended by Stats. 2022, Ch. 452, Sec. 74. (SB 1498) Effective January 1, 2023.)
  122. 25244.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    If a broker-dealer or investment adviser certificate is suspended or revoked, the person must immediately surrender the certificate to the commissioner.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25244. Any person whose certificate as a broker-dealer or investment adviser has been suspended or revoked shall immediately surrender such certificate to the commissioner. (Amended by Stats. 1981, Ch. 1120, Sec. 9. Effective October 2, 1981. Operative November 1, 1981, by Sec. 15 of Ch. 1120.)
  123. 25245.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    A person must not willfully make a material false statement, or willfully leave out a required material fact, in an application, notice, or report filed with the commissioner under this part.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25245. It is unlawful for any person willfully to make any untrue statement of a material fact in any application, notice, or report filed with the commissioner under this part, or willfully to omit to state in any such application, notice, or report any material fact which is required to be stated therein. (Amended by Stats. 1997, Ch. 391, Sec. 28. Effective January 1, 1998.)
  124. 25246.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    An agent or broker-dealer may not require a married person’s spouse to give prior consent or authorization as a condition of a securities purchase or sale.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25246. It is unlawful for any agent or broker-dealer to require, as a condition to the purchase or sale of securities for and in the name of a married person, that the prior consent or authorization of the spouse of that person be obtained. (Amended by Stats. 1981, Ch. 1120, Sec. 10. Effective October 2, 1981. Operative November 1, 1981, by Sec. 15 of Ch. 1120.)
  125. 25247.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    The commissioner must provide certain broker-dealer and adviser license and disciplinary information on request, and broker-dealers or agents must give clients a written notice about where to get license-status information when a new account is opened, unless a narrow exemption applies.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25247. (a) Upon written or oral request, the commissioner shall make available to any person the information specified in Section 7929.005 of the Government Code and made available through the Public Disclosure Program of the Financial Industry Regulatory Authority with respect to any broker-dealer or agent licensed or regulated under this part. The commissioner shall also make available the current license status and the year of issuance of the license of a broker-dealer. Any information disclosed pursuant to this subdivision shall constitute a public record. Notwithstanding any other law, the commissioner may disclose either orally or in writing that information pursuant to this subdivision. There shall be no liability on the part of, and no cause of action of any nature shall arise against, the state, the Department of Financial Protection and Innovation, the Commissioner of Financial Protection and Innovation, or any officer, agent, or employee of the state or the Department of Financial Protection and Innovation for the release of any false or unauthorized information, unless the release of that information was done with knowledge and malice. (b) Any broker-dealer or agent licensed or regulated under this part shall, upon request, deliver a written notice to any client when a new account is opened stating that information about the license status or disciplinary record of a broker-dealer or an agent may be obtained from the Division of Corporations, or from any other source that provides substantially similar information. (c) The notice provided under subdivision (b) shall contain the office location or telephone number where the information may be obtained. (d) A broker-dealer or agent is exempt from providing the notice required under subdivision (b) if a person who does not have a financial relationship with the broker-dealer or agent, requests only general operational information such as the nature of the broker-dealer’s or agent’s business, office location, hours of operation, basic services, and fees, but does not solicit advice regarding investments or other services offered. (e) Upon written or oral request, the commissioner shall make available to any person the disciplinary records maintained on the Investment Adviser Registration Depository and made available through the Investment Adviser Public Disclosure internet website as to any investment adviser, investment adviser representative, or associated person of an investment adviser licensed or regulated under this part. The commissioner shall also make available the current license status and the year of issuance of the license of an investment adviser. Any information disclosed pursuant to this subdivision shall constitute a public record. Notwithstanding any other law, the commissioner may disclose that information either orally or in writing pursuant to this subdivision. There shall be no liability on the part of, and no cause of action of any nature shall arise against, the state, the Department of Financial Protection and Innovation, the Commissioner of Financial Protection and Innovation, or any officer, agent, or employee of the state or the Department of Financial Protection and Innovation for the release of any false or unauthorized information, unless the release of that information was done with knowledge and malice. (f) Section 461 of the Business and Professions Code shall not apply to the Division of Corporations when using a national, uniform application adopted or approved for use by the Securities and Exchange Commission, the North American Securities Administrators Association, or the Financial Industry Regulatory Authority that is required for participation in the Central Registration Depository or the Investment Adviser Registration Depository. (g) This section shall not require the disclosure of criminal history record information maintained by the Federal Bureau of Investigation pursuant to Section 534 of Title 28 of the United States Code, and the rules thereunder, or information not otherwise subject to disclosure under the Information Practices Act of 1977. (Amended (as amended by Stats. 2021, Ch. 615, Sec. 58) by Stats. 2022, Ch. 452, Sec. 76. (SB 1498) Effective January 1, 2023.)
  126. 25248.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    The commissioner may order a covered person to stop certain client- or trust-fund disbursements, fund receipts, or other business operations if the person is insolvent or is operating unsafely, injuriously, or without authorization.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25248. (a) If the commissioner finds, as a result of any examination or investigation or from any report made to the commissioner, that any person subject to this part, other than an investment adviser subject to Section 25230.1, is in an insolvent condition, or is conducting a securities, broker-dealer, or investment advisory business in such an unsafe, injurious, or unauthorized manner as to render further operations hazardous to the public or to customers, the commissioner may, by an order addressed to and served by registered or certified mail or by personal service on that person and on any other person having in his or her possession or control any client funds, trust funds, or other property deposited with that person, direct discontinuance of the disbursement of client or trust funds by the parties or any of them, the receipt of client or trust funds, or other business operations. No person having in his or her possession any of these funds shall be liable for failure to comply with the order unless he or she has received written notice of the order. Subject to subdivision (b), the order shall remain in effect until set aside by the commissioner, in whole or in part, the person is the subject of an order for relief in bankruptcy, or pursuant to Section 25253, the commissioner has assumed possession of the broker-dealer or investment adviser. (b) Within 15 days from the date of an order pursuant to subdivision (a), the person may request a hearing under the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code). Upon receipt of a request, the matter shall be set for hearing to commence within 30 days after that receipt unless the person subject to this division consents to a later date. If no hearing is requested within 15 days after the mailing or service of the notice and none is ordered by the commissioner, the failure to request a hearing shall constitute a waiver of the right to a hearing. Neither the request for a hearing nor the hearing itself shall stay the order issued by the commissioner under subdivision (a). (Amended by Stats. 2009, Ch. 500, Sec. 30. (AB 1059) Effective January 1, 2010.)
  127. 25249.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    If the commissioner has reasonable grounds after an examination or investigation, the commissioner must order a broker-dealer or investment adviser to stop the violation.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25249. If, after examination or investigation, the commissioner has reasonable grounds to believe that any broker-dealer or investment adviser is violating or has violated any law or rule binding upon it, the commissioner shall, by written order addressed to the broker-dealer or investment adviser, direct the discontinuance of the violation. The order shall be effective immediately, but shall not become final except in accordance with the provisions of Section 25251. (Amended by Stats. 2022, Ch. 188, Sec. 1. (AB 2433) Effective January 1, 2023.)
  128. 25250.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    If the commissioner finds reasonable grounds after an examination or investigation, the commissioner must order a broker-dealer or investment adviser to stop unsafe or injurious practices, except for an investment adviser subject to Section 25230.1.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25250. If, after examination or investigation, the commissioner has reasonable grounds to believe that any broker-dealer or investment adviser, other than an investment adviser subject to Section 25230.1, is conducting or has conducted business in an unsafe or injurious manner, the commissioner shall, by written order addressed to the broker-dealer or investment adviser, direct the discontinuance of the unsafe or injurious practices. The order shall be effective immediately, but shall not become final except in accordance with the provisions of Section 25251. (Amended by Stats. 2022, Ch. 188, Sec. 2. (AB 2433) Effective January 1, 2023.)
  129. 25251.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    This section requires notice before certain final orders, gives the affected broker-dealer or investment adviser a right to request a hearing, and requires compliance or discontinuance in certain circumstances.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25251. (a) No order issued pursuant to Section 25249 or 25250 may become final except after notice to the affected broker-dealer or investment adviser of the commissioner’s intention to make the order final and of the reasons for the finding. The commissioner shall also notify the broker-dealer or investment adviser that upon receiving a request the matter shall be set for hearing to commence within 15 business days after receipt of the request. The broker-dealer or investment adviser may consent to have the hearing commence at a later date. If no hearing is requested within 30 days after the mailing or service of the required notice, and none is ordered by the commissioner, the order may become final without a hearing and the broker-dealer or investment adviser shall immediately discontinue the practices named in the order. If a hearing is requested or ordered, it shall be held in accordance with the provisions of the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and the commissioner shall have all of the powers granted under that act. If, upon the conclusion of the hearing, it appears to the commissioner that the broker-dealer or investment adviser is conducting or has conducted business in an unsafe and injurious manner or is violating or has violated any law of this state, or any rule binding upon it, the commissioner shall make the order of discontinuance final and the broker-dealer or investment adviser shall immediately discontinue the practices named in the order. (b) The broker-dealer or investment adviser may within 10 days after an order is made final commence an action to restrain enforcement of the order. If the enforcement of the order is not enjoined within 10 days by the court in which the action is brought, the broker-dealer or investment adviser shall comply with the order. (Amended by Stats. 2022, Ch. 188, Sec. 3. (AB 2433) Effective January 1, 2023.)
  130. 25252.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    The commissioner may impose administrative penalties for willful violations of this division, with different maximum amounts depending on the type of regulated person and the violation number.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25252. The commissioner may, after appropriate notice and opportunity for hearing, by orders, levy administrative penalties as follows: (a) Any person subject to this division, other than a broker-dealer or investment adviser, who willfully violates any provision of this division, or who willfully violates any rule or order adopted or issued pursuant to this division, is liable for administrative penalties of not more than one thousand dollars ($1,000) for the first violation, and not more than two thousand five hundred dollars ($2,500) for each subsequent violation. (b) Any broker-dealer or investment adviser that willfully violates any provision of this division to which it is subject, or that willfully violates any rule or order adopted or issued pursuant to this division and to which it is subject, is liable for administrative penalties of not more than five thousand dollars ($5,000) for the first violation, not more than ten thousand dollars ($10,000) for the second violation, and not more than fifteen thousand dollars ($15,000) for each subsequent violation. (c) The administrative penalties shall be collected by the commissioner and paid into the State Corporations Fund. (d) The administrative penalties available to the commissioner pursuant to this section are not exclusive, and may be sought and employed in any combination with civil, criminal, and other administrative remedies deemed advisable by the commissioner to enforce the provisions of this division. (e) After the exhaustion of the review procedures provided in accordance with the provisions of the Administrative Procedure Act, Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, the commissioner may apply to the appropriate superior court for a judgment in the amount of the administrative penalty and costs awarded in a final decision and order compelling the respondent, or the named or cited person, to comply with the final decision of the commissioner brought under this division. The application shall include a certified copy of the final decision of the commissioner and shall constitute a sufficient showing to warrant the issuance of the judgment and order from superior court. (Amended by Stats. 2013, Ch. 335, Sec. 4. (SB 538) Effective January 1, 2014.)
  131. 25253.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    If certain problems occur, the commissioner must send notice and may take possession of a broker-dealer’s or investment adviser’s property and business, and appoint a conservator.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25253. (a) Whenever it appears to the commissioner that any of the conditions specified in subdivision (b) has occurred with respect to any broker-dealer or investment adviser subject to this division, the commissioner shall dispatch a written notice demanding remedial action and a summary of findings, as referred to in Section 25248, to the principal officer of that broker-dealer or investment adviser or to its manager of record. (b) The conditions that require the commissioner to commence remedial action against a broker-dealer or investment adviser pursuant to subdivision (a) includes any of the following: (1) The broker-dealer or investment adviser is in an insolvent condition. (2) It is conducting its securities, broker-dealer, or investment advisory business in an unsafe or unauthorized manner. (3) It has violated any rule or order adopted or issued pursuant to this division that is or has been necessary for the protection of any investor. (4) It refuses to submit its books, papers, and affairs to the inspection of any examiner or investigator. (5) It neglects or refuses to observe any order of the commissioner made pursuant to this division that is or has been necessary for the protection of any investor, within the time specified therein, unless the enforcement of the order is restrained in a proceeding brought by the broker-dealer or investment adviser. (6) It has violated any provision of this division or any similar regulatory scheme of this state or a foreign jurisdiction relating to the protection of any investor. (7) Any officer, director, stockholder, or partner of the broker-dealer or investment adviser, or attorney-in-fact of the broker-dealer or investment adviser has embezzled, misappropriated, or willfully diverted the assets or client or trust funds of the broker-dealer or investment adviser. (8) It has permitted its capital to be lower than the minimum required by law, including any rule or order adopted or issued pursuant to this division. (9) It has failed to comply with the bonding requirements of Chapter 2 (commencing with Section 25210) or Chapter 3 (commencing with Section 25230) of this part. (c) The broker-dealer or investment adviser shall be afforded a reasonable opportunity to comply or otherwise effect those remedies specified in the written notice or any other remedies that the commissioner may deem acceptable. However, if the broker-dealer or investment adviser fails to comply within five days of receipt of the notice, or as soon as it appears to the commissioner that no compliance is possible, or in the event prompt delivery of the written notice is impossible, the commissioner may take possession of the property and business of the broker-dealer or investment adviser and retain possession until the broker-dealer or investment adviser, subject to those conditions that the commissioner may prescribe, resumes its business or its affairs are finally liquidated. (d) Whenever the commissioner has taken possession of any broker-dealer or investment adviser, the broker-dealer or investment adviser, within 10 days after the taking, may apply to the superior court to enjoin further proceedings in any California county or city and county in which the California office or offices of the broker-dealer or investment adviser is located. The court, after ordering the commissioner to show cause why further proceedings should not be enjoined and after a hearing and a determination of the facts upon the merits, may dismiss the application or enjoin the commissioner from further proceedings and direct the commissioner to surrender the property and business to the broker-dealer or investment adviser, or make any further order that may be just. (e) If any facts occur that would entitle the commissioner under subdivision (b) to take possession of the property, business, and assets of a broker-dealer or investment adviser, the commissioner may appoint a conservator of the broker-dealer or investment adviser and require the conservator to post a bond. The conservator, under the direction of the commissioner, shall take possession of the property, business, and assets of the broker-dealer or investment adviser and take any action that the conservator deems necessary to conserve the assets of the broker-dealer or investment adviser pending further disposition of its business. The conservator shall retain possession until the property, business, and assets of the broker-dealer or investment adviser are returned to the broker-dealer or investment adviser or until further order of the commissioner. (f) Subject to the other provisions of this section, a conservator, while in possession of the property, business, and assets of a broker-dealer or investment adviser, has the same powers and rights and is subject to the same duties and obligations as the commissioner while in possession of the property, business, and assets of a broker-dealer or investment adviser. During that time, the rights of a broker-dealer or investment adviser and of all persons with respect thereto, subject to the other provisions of this section, are the same as if the commissioner had taken possession of the property, business, and assets. A conservator, while in possession of the property, business, and assets of a broker-dealer or investment adviser shall have all the rights, powers, and privileges of the broker-dealer or investment adviser, its officers and directors or partners. All expenses of the conservatorship shall be paid out of the assets of the broker-dealer or investment adviser and shall be a lien thereon which shall be prior to any other lien. (g) An investment adviser subject to Section 25230.1 is not subject to this section, unless that investment adviser or persons acting on behalf of that investment adviser committed any of the acts of fraud or deceit set forth in paragraph (7) of subdivision (b). (Added by Stats. 1998, Ch. 391, Sec. 9. Effective January 1, 1999.)
  132. 25254.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    The commissioner may seek ancillary relief in certain administrative actions, and may later ask superior court to enter judgment to enforce awarded relief and costs after review procedures are exhausted.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25254. (a) If the commissioner determines it is in the public interest, the commissioner may include in any administrative action brought under this part a claim for ancillary relief, including, but not limited to, a claim for restitution or disgorgement or damages on behalf of the persons injured by the act or practice constituting the subject matter of the action, and the administrative law judge shall have jurisdiction to award additional relief. (b) In an administrative action brought under this part, the commissioner is entitled to recover costs, which in the discretion of the administrative law judge may include an amount representing reasonable attorney’s fees and investigative expenses for the services rendered, for deposit into the State Corporations Fund for the use of the Department of Financial Protection and Innovation. (c) After the exhaustion of the review procedures provided in accordance with the provisions of the Administrative Procedure Act, Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, the commissioner may apply to the appropriate superior court for a judgment in the amount of the ancillary relief and costs awarded in a final decision and order compelling the respondent, or the named or cited person, to comply with the final decision of the commissioner brought under this division. The application shall include a certified copy of the final decision of the commission and shall constitute a sufficient showing to warrant the issuance of the judgment and order from superior court. (Amended by Stats. 2022, Ch. 452, Sec. 77. (SB 1498) Effective January 1, 2023.)
  133. 25255.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    The commissioner may use civil, criminal, and administrative remedies together to enforce this division, and those remedies are not exclusive.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25255. The civil, criminal, and administrative remedies available to the commissioner pursuant to this division are not exclusive, and may be sought and employed in any combination deemed advisable by the commissioner to enforce the provisions of this division. (Added by Stats. 1998, Ch. 391, Sec. 11. Effective January 1, 1999.)
  134. 25256.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    The commissioner may discipline a broker-dealer or investment adviser based on certain disciplinary actions taken elsewhere, and certified records of those actions count as conclusive evidence.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 3. REGULATION AND NOTICE FILING REQUIREMENTS OF AGENTS, BROKER-DEALERS, INVESTMENT ADVISER REPRESENTATIVES, AND INVESTMENT ADVISERS [25200 - 25256] ( Heading of Part 3 amended by Stats. 1997, Ch. 391, Sec. 16. ) ## CHAPTER 4. General Provisions [25240 - 25256] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25256. (a) For any broker-dealer or investment adviser, a disciplinary action taken by the State of California, another state, an agency of the federal government, or another country for an action substantially related to the activity regulated under this division may be grounds for disciplinary action by the commissioner. A certified copy of the record of the disciplinary action taken against the licensee by the State of California, other state, agency of the federal government, or other country shall be conclusive evidence of the events related therein. (b) Nothing in this section precludes the commissioner from applying a specific statutory provision in this division providing for discipline against a broker-dealer or investment adviser, as a result of disciplinary action taken against a broker-dealer or an investment adviser, by the State of California, another state, an agency of the federal government, or another country. (Added by Stats. 2003, Ch. 473, Sec. 8. Effective January 1, 2004.)
  135. 25300.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 4. ADVERTISING SECURITIES [25300 - 25302] ( Part 4 added by Stats. 1968, Ch. 88. )

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    A person may not publish an advertisement in California about a security sold or offered for sale there unless a true copy was filed with the commissioner at least three business days before publication, unless the commissioner allows a shorter period.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 4. ADVERTISING SECURITIES [25300 - 25302] ( Part 4 added by Stats. 1968, Ch. 88. ) ## 25300. (a) No person shall publish any advertisement in this state concerning any security sold or offered for sale in this state unless a true copy of the advertisement has first been filed in the office of the commissioner at least three business days prior to the publication or a shorter period as the commissioner may by rule or order allow. (b) Subdivision (a) of this section does not apply to: (1) Any advertisement for any security published by a licensed broker-dealer if the broker-dealer is not effecting transactions in that security as an underwriter or other participant in a distribution for the issuer; (2) Any advertisement for any security published by an issuer or any underwriter or other participant in a distribution for the issuer if the security or transaction is exempted by the provisions of Chapter 1 (commencing with Section 25100) of Part 2 of this division; (3) Any advertisement for any security in a nonissuer transaction if the security is exempted by Section 25100 or an offer of the security is exempted by subdivision (g) of Section 25104; (4) Any advertisement permitted or required by Section 5(b)(2) or Section 2(a)(10)(b) of the Securities Act of 1933 with respect to a security which has been registered under the Securities Act of 1933 and qualified for sale in this state; (5) Any advertisement with respect to (A) a security that is subject to Sections 25100.1 and 25101.1 and the advertisement is permitted or required under the Securities Act of 1933, (B) a transaction that is subject to Section 25102.1 and the advertisement is permitted or required under the Securities Act of 1933, or (C) an investment adviser that is subject to Section 25230.1 and the advertisement is permitted or required under the Investment Adviser Act of 1940; or (6) Any other advertisement exempted by rule of the commissioner. (Amended by Stats. 2019, Ch. 143, Sec. 49. (SB 251) Effective January 1, 2020.)
  136. 25301.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 4. ADVERTISING SECURITIES [25300 - 25302] ( Part 4 added by Stats. 1968, Ch. 88. )

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    Certain exempt advertisements by a broker-dealer must be approved before use and kept on file for three years.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 4. ADVERTISING SECURITIES [25300 - 25302] ( Part 4 added by Stats. 1968, Ch. 88. ) ## 25301. All advertisements published by any broker-dealer that are exempted from filing by paragraph (1) or paragraph (6) of subdivision (b) of Section 25300 shall be approved prior to use by signature or initial of an officer, partner, or responsible supervisory official of the broker-dealer and the signed or initialed copy shall be retained by the broker-dealer in an appropriate file for a period of three years, subject to examination by the commissioner. (Amended by Stats. 1997, Ch. 391, Sec. 30. Effective January 1, 1998.)
  137. 25302.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 4. ADVERTISING SECURITIES [25300 - 25302] ( Part 4 added by Stats. 1968, Ch. 88. )

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    A person may not publish an advertisement about a security in this state once the commissioner finds it false or misleading, or missing needed information, and gives written notice.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 4. ADVERTISING SECURITIES [25300 - 25302] ( Part 4 added by Stats. 1968, Ch. 88. ) ## 25302. (a) A person shall not publish any advertisement concerning any security in this state after the commissioner finds that the advertisement contains any statement that is false or misleading or omits to make any statement necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading and so notifies the person in writing. This notification may be given summarily without notice or hearing. At any time after the issuance of a notification under this section, the person desiring to use the advertisement may in writing request that the order be rescinded. Upon the receipt of the written request, the matter shall be set for hearing to commence within 15 business days after receipt unless the person making the request consents to a later date. After the hearing, which shall be conducted in accordance with the provisions of the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), the commissioner shall determine whether to affirm and continue or to rescind the order, and the commissioner shall have all the powers granted under the act. (b) This section does not apply to any advertisement for any security which is subject to the supervision, regulation or examination of any of the following: (1) The Insurance Commissioner. (2) The Commissioner of Financial Protection and Innovation. (3) The Public Utilities Commission. (4) The Comptroller of the Currency of the United States. (5) The Federal Deposit Insurance Corporation. (6) The Board of Governors of the Federal Reserve System. (Amended by Stats. 2022, Ch. 452, Sec. 78. (SB 1498) Effective January 1, 2023.)
  138. 25400.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 5. FRAUDULENT AND PROHIBITED PRACTICES [25400 - 25404] ( Part 5 added by Stats. 1968, Ch. 88. )

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    This section makes it unlawful for any person in the state to use securities trades, orders, information, or statements to create a false or misleading market appearance or to induce buying or selling through misleading conduct.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 5. FRAUDULENT AND PROHIBITED PRACTICES [25400 - 25404] ( Part 5 added by Stats. 1968, Ch. 88. ) ## 25400. It is unlawful for any person, directly or indirectly, in this state: (a) For the purpose of creating a false or misleading appearance of active trading in any security or a false or misleading appearance with respect to the market for any security, (1) to effect any transaction in a security which involves no change in the beneficial ownership thereof, or (2) to enter an order or orders for the purchase of any security with the knowledge that an order or orders of substantially the same size, at substantially the same time and at substantially the same price, for the sale of any such security, has been or will be entered by or for the same or different parties, or (3) to enter an order or orders for the sale of any security with the knowledge that an order or orders of substantially the same size, at substantially the same time and at substantially the same price, for the purchase of any such security, has been or will be entered by or for the same or different parties. (b) To effect, alone or with one or more other persons, a series of transactions in any security creating actual or apparent active trading in such security or raising or depressing the price of such security, for the purpose of inducing the purchase or sale of such security by others. (c) If such person is a broker-dealer or other person selling or offering for sale or purchasing or offering to purchase the security, to induce the purchase or sale of any security by the circulation or dissemination of information to the effect that the price of any such security will or is likely to rise or fall because of market operations of any one or more persons conducted for the purpose of raising or depressing the price of such security. (d) If such person is a broker-dealer or other person selling or offering for sale or purchasing or offering to purchase the security, to make, for the purpose of inducing the purchase or sale of such security by others, any statement which was, at the time and in the light of the circumstances under which it was made, false or misleading with respect to any material fact, or which omitted to state any material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, and which he knew or had reasonable ground to believe was so false or misleading. (e) For a consideration, received directly or indirectly from a broker-dealer or other person selling or offering for sale or purchasing or offering to purchase the security, to induce the purchase or sale of any security by the circulation or dissemination of information to the effect that the price of such security will or is likely to rise or fall because of the market operations of any one or more persons conducted for the purpose of raising or depressing the price of such security. (Added by Stats. 1968, Ch. 88.)
  139. 25401.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 5. FRAUDULENT AND PROHIBITED PRACTICES [25400 - 25404] ( Part 5 added by Stats. 1968, Ch. 88. )

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    A person must not offer, sell, buy, or offer to buy a security in this state through a written or oral communication that contains a material false statement or leaves out a material fact needed to avoid misleading the statement.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 5. FRAUDULENT AND PROHIBITED PRACTICES [25400 - 25404] ( Part 5 added by Stats. 1968, Ch. 88. ) ## 25401. It is unlawful for any person to offer or sell a security in this state, or to buy or offer to buy a security in this state, by means of any written or oral communication that includes an untrue statement of a material fact or omits to state a material fact necessary to make the statements made, in the light of the circumstances under which the statements were made, not misleading. (Amended by Stats. 2015, Ch. 190, Sec. 19. (AB 1517) Effective January 1, 2016.)
  140. 25402.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 5. FRAUDULENT AND PROHIBITED PRACTICES [25400 - 25404] ( Part 5 added by Stats. 1968, Ch. 88. )

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    Certain insiders and related persons must not buy or sell the issuer’s securities in California when they know material nonpublic information from their relationship to the issuer.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 5. FRAUDULENT AND PROHIBITED PRACTICES [25400 - 25404] ( Part 5 added by Stats. 1968, Ch. 88. ) ## 25402. It is unlawful for an issuer or any person who is an officer, director or controlling person of an issuer or any other person whose relationship to the issuer gives him access, directly or indirectly, to material information about the issuer not generally available to the public, to purchase or sell any security of the issuer in this state at a time when he knows material information about the issuer gained from such relationship which would significantly affect the market price of that security and which is not generally available to the public, and which he knows is not intended to be so available, unless he has reason to believe that the person selling to or buying from him is also in possession of the information. (Added by Stats. 1968, Ch. 88.)
  141. 25403.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 5. FRAUDULENT AND PROHIBITED PRACTICES [25400 - 25404] ( Part 5 added by Stats. 1968, Ch. 88. )

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    This section makes it unlawful to use another person to commit a violation of the division or related rules/orders, and treats knowing control, inducement, or substantial assistance as a violation too.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 5. FRAUDULENT AND PROHIBITED PRACTICES [25400 - 25404] ( Part 5 added by Stats. 1968, Ch. 88. ) ## 25403. (a) Every person who with knowledge directly or indirectly controls and induces any person to violate any provision of this division or any rule or order thereunder shall be deemed to be in violation of that provision, rule, or order to the same extent as the controlled and induced person. (b) Any person that knowingly provides substantial assistance to another person in violation of any provision of this division or any rule or order thereunder shall be deemed to be in violation of that provision, rule, or order to the same extent as the person to whom the assistance was provided. (c) It shall be unlawful for any person directly or indirectly to do any act or thing which would be unlawful for that person to do under any provision of this division or any rule or order thereunder through or by any other person. (d) Nothing in this section shall be construed to limit the power of the state to punish any person for any conduct which constitutes a crime under any other statute. (Added by Stats. 1998, Ch. 391, Sec. 12. Effective January 1, 1999.)
  142. 25404.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 5. FRAUDULENT AND PROHIBITED PRACTICES [25400 - 25404] ( Part 5 added by Stats. 1968, Ch. 88. )

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    It is unlawful for any person to tamper with records or give an untrue statement to the commissioner when doing so is intended to impede, obstruct, or influence enforcement of this division.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 5. FRAUDULENT AND PROHIBITED PRACTICES [25400 - 25404] ( Part 5 added by Stats. 1968, Ch. 88. ) ## 25404. (a) It is unlawful for any person to knowingly alter, destroy, mutilate, conceal, cover up, falsify, or make a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the administration or enforcement of this division. (b) It is unlawful for any person to knowingly make an untrue statement to the commissioner during the course of licensing, investigation, or examination, with the intent to impede, obstruct, or influence the administration or enforcement of any provision of this division. (Amended by Stats. 2007, Ch. 101, Sec. 5. Effective January 1, 2008.)
  143. 25500.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. )

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    A person who willfully participates in a violation of Section 25400 is liable for damages to anyone who bought or sold a security at an affected price.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25500. Any person who willfully participates in any act or transaction in violation of Section 25400 shall be liable to any other person who purchases or sells any security at a price which was affected by such act or transaction for the damages sustained by the latter as a result of such act or transaction. Such damages shall be the difference between the price at which such other person purchased or sold securities and the market value which such securities would have had at the time of his purchase or sale in the absence of such act or transaction, plus interest at the legal rate. (Repealed and added by Stats. 1968, Ch. 88.)
  144. 25501.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. )

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    A violator of Section 25401 can be sued by the security buyer or seller for rescission or damages, subject to stated defenses, and the court must award attorney’s fees and costs to a prevailing buyer or seller.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25501. Any person who violates Section 25401 shall be liable to the person who purchases a security from, or sells a security to, that person, who may sue either for rescission or for damages (if the plaintiff or the defendant, as the case may be, no longer owns the security), unless the defendant proves that the plaintiff knew the facts concerning the untruth or omission or that the defendant exercised reasonable care and did not know (or if the defendant had exercised reasonable care, would not have known) of the untruth or omission. Upon rescission, a purchaser may recover the consideration paid for the security, plus interest at the legal rate, less the amount of any income received on the security, upon tender of the security. Upon rescission, a seller may recover the security, upon tender of the consideration paid for the security plus interest at the legal rate, less the amount of any income received by the defendant on the security. Damages recoverable under this section by a purchaser shall be an amount equal to the difference between (a) the price at which the security was bought plus interest at the legal rate from the date of purchase and (b) the value of the security at the time it was disposed of by the plaintiff plus the amount of any income received on the security by the plaintiff. Damages recoverable under this section by a seller shall be an amount equal to the difference between (1) the value of the security at the time of the filing of the complaint plus the amount of any income received by the defendant on the security and (2) the price at which the security was sold plus interest at the legal rate from the date of sale. Any tender specified in this section may be made at any time before entry of judgment. In addition to the relief described above, the court shall award reasonable attorney’s fees and costs to a prevailing purchaser or seller who succeeds in establishing a right to the relief provided by this section. (Amended by Stats. 2021, Ch. 617, Sec. 2. (AB 511) Effective January 1, 2022.)
  145. 25501.5.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. )

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    A buyer or seller dealing with a broker-dealer that lacked the required certificate at the time of the trade may sue for rescission or damages, and the court may award attorney’s fees and costs to a prevailing plaintiff.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25501.5. (a) (1) A person who purchases a security from or sells a security to a broker-dealer that is required to be licensed and has not, at the time of the sale or purchase, applied for and secured from the commissioner a certificate under Part 3 (commencing with Section 25200), that is in effect at the time of the sale or purchase authorizing that broker-dealer to act in that capacity, may bring an action for rescission of the sale or purchase or, if the plaintiff or the defendant no longer owns the security, for damages. (2) Upon rescission and tender of the security, a purchaser may recover the consideration paid for the security plus interest at the legal rate, less the amount of any income received on the security. (3) Upon rescission and tender of the consideration paid for the security plus interest at the legal rate, a seller may recover the security plus the amount of any income received by the defendant on the security. (4) Damages recoverable under this section by a purchaser shall be an amount equal to the difference between the following: (A) The price at which the security was bought plus interest at the legal rate from the date of purchase. (B) The value of the security at the time it was disposed of by the plaintiff plus the amount of any income received on the security by the plaintiff. (5) Damages recoverable under this section by a seller shall be an amount equal to the difference between the following: (A) The value of the security at the time of the filing of the complaint plus the amount of any income received by the defendant on the security. (B) The price at which the security was sold plus interest at the legal rate from the date of sale. (6) A tender of a security or of consideration paid for a security plus interest pursuant to this section may be made at any time before entry of judgment. (b) The court, in its discretion, may award reasonable attorney’s fees and costs to a prevailing plaintiff under this section. (Added by Stats. 2004, Ch. 575, Sec. 2. Effective January 1, 2005.)
  146. 25502.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. )

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    A person who violates Section 25402 is liable to the buyer or seller for damages based on the price difference, plus legal-rate interest, unless the defendant proves the plaintiff already knew the information or would have traded anyway at the same price.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25502. Any person who violates Section 25402 shall be liable to the person who purchases a security from him or sells a security to him, for damages equal to the difference between the price at which such security was purchased or sold and the market value which such security would have had at the time of the purchase or sale if the information known to the defendant had been publicly disseminated prior to that time and a reasonable time had elapsed for the market to absorb the information, plus interest at the legal rate, unless the defendant proves that the plaintiff knew the information or that the plaintiff would have purchased or sold at the same price even if the information had been revealed to him. (Repealed and added by Stats. 1968, Ch. 88.)
  147. 25502.5.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. )

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    This section makes certain non-issuer violators of Section 25402 liable for damages, costs, and attorney’s fees, limits recovery in some cases by amounts paid in related SEC proceedings, and requires board and court actions in specified situations.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25502.5. (a) Any person other than the issuer who violates Section 25402 shall be liable to the issuer of the security purchased or sold in violation of Section 25402 for damages in an amount up to three times the difference between the price at which the security was purchased or sold and the market value which the security would have had at the time of the purchase or sale if the information known to the defendant had been publicly disseminated prior to that time and a reasonable time had elapsed for the market to absorb the information and shall be liable to the issuer of the security or to a person who institutes an action under this section in the right of the issuer of the security for reasonable costs and attorney’s fees. (b) The amounts recoverable under this section by the issuer shall be reduced by any amount paid by the defendant in a proceeding brought by the Securities and Exchange Commission with respect to the same transaction or transactions under the federal Insider Trading Sanctions Act of 1984 (15 U.S.C. Secs. 78a, 78c, 78o, 78t, 78u, and 78ff) or any other act regardless of whether the amount was paid pursuant to a judgment or settlement or paid before or after the filing of an action by the plaintiff against the defendant. If a proceeding has been commenced by the Securities and Exchange Commission but has not been finally resolved, the court shall delay entering a judgment for the plaintiff under this section until that proceeding is resolved. (c) If any shareholder of an issuer alleges to the board that there has been a violation of this section, the board shall be required to consider the allegation in good faith, and if the allegation involves misconduct by any director, that director shall not be entitled to vote on any matter involving the allegation. However, that director may be counted in determining the presence of a quorum at a meeting of the board or a committee of the board. (d) This section shall only apply to issuers who have total assets in excess of one million dollars ($1,000,000) and have a class of equity security held of record by 500 or more persons. (Added by Stats. 1988, Ch. 1339, Sec. 4.)
  148. 25503.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. )

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    A violator of the specified securities provisions is liable to the buyer, who may sue for recovery of the price paid or damages, plus interest and reasonable attorney’s fees, subject to tender and ownership rules.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25503. Any person who violates Section 25110, 25130, or 25133, or a condition of qualification under Chapter 2 (commencing with Section 25110) of this part, imposed pursuant to Section 25141, or an order suspending trading issued pursuant to Section 25219, shall be liable to any person acquiring from them the security sold in violation of that section, who may sue to recover the consideration they paid for that security with interest thereon at the legal rate, and reasonable attorney’s fees, less the amount of any income received therefrom, upon the tender of that security, or for damages, if they no longer own the security, or if the consideration given for the security is not capable of being returned. Damages, if the plaintiff no longer owns the security, shall be equal to the difference between (a) the purchase price plus interest at the legal rate from the date of purchase, plus reasonable attorney’s fees, and (b) the value of the security at the time it was disposed of by the plaintiff plus the amount of any income received therefrom by the plaintiff. Damages, if the consideration given for the security is not capable of being returned, shall be equal to the value of that consideration plus interest at the legal rate from the date of purchase, provided the security is tendered, plus reasonable attorney’s fees; and if the plaintiff no longer owns the security, damages in that case shall be equal to the difference between (a) the value of the consideration given for the security plus interest at the legal rate from the date of purchase, plus reasonable attorney’s fees; and (b) the value of the security at the time it was disposed of by the plaintiff plus the amount of any income received therefrom by the plaintiff. Any person who violates Section 25120 or a condition of qualification under Chapter 3 (commencing with Section 25120) of this part imposed pursuant to Section 25141, shall be liable to any person acquiring from them the security sold in violation of that section who may sue to recover the difference between (a) the value of the consideration received by the seller and (b) the value of the security at the time it was received by the buyer, with interest thereon at the legal rate from the date of purchase, plus reasonable attorney’s fees. Any person on whose behalf an offering is made and any underwriter of the offering, whether on a best efforts or a firm commitment basis, shall be jointly and severally liable under this section, but in no event shall any underwriter (unless that underwriter shall have knowingly received from the issuer for acting as an underwriter some benefit, directly or indirectly, in which all other underwriters similarly situated did not share in proportion to their respective interest in the underwriting) be liable in any suit or suits authorized under this section for damages in excess of the total price at which the securities underwritten by them and distributed to the public were offered to the public. Any tender specified in this section may be made at any time before entry of judgment. No person shall be liable under this section for violation of Section 25110, 25120 or 25130 if the sale of the security is qualified prior to the payment or receipt of any part of the consideration for the security sold, even though an offer to sell or a contract of sale may have been made or entered into without qualification. (Amended by Stats. 2021, Ch. 617, Sec. 3. (AB 511) Effective January 1, 2022.)
  149. 25504.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. )

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    Certain controllers, partners, officers, directors, similar persons, and material aiders can be jointly and severally liable for violations under Sections 25501 or 25503, unless the other liable person lacked knowledge or reasonable grounds to know the facts creating liability.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25504. Every person who directly or indirectly controls a person liable under Section 25501 or 25503, every partner in a firm so liable, every principal executive officer or director of a corporation so liable, every person occupying a similar status or performing similar functions, every employee of a person so liable who materially aids in the act or transaction constituting the violation, and every broker-dealer or agent who materially aids in the act or transaction constituting the violation, are also liable jointly and severally with and to the same extent as such person, unless the other person who is so liable had no knowledge of or reasonable grounds to believe in the existence of the facts by reason of which the liability is alleged to exist. (Repealed and added by Stats. 1968, Ch. 88.)
  150. 25504.1.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. )

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    A person who materially assists certain securities-law violations or related qualification/trading orders, and does so with intent to deceive or defraud, is jointly and severally liable.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25504.1. Any person who materially assists in any violation of Section 25110, 25120, 25130, 25133, or 25401, or a condition of qualification under Chapter 2 (commencing with Section 25110) of Part 2 of this division imposed pursuant to Section 25141, or a condition of qualification under Chapter 3 (commencing with Section 25120) of Part 2 of this division imposed pursuant to Section 25141, or an order suspending trading issued pursuant to Section 25219, with intent to deceive or defraud, is jointly and severally liable with any other person liable under this chapter for such violation. (Amended by Stats. 1977, Ch. 762.)
  151. 25504.2.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. )

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    Some experts and similar professionals can be jointly and severally liable for material misstatements or omissions in a prospectus or offering circular if they consented to being named and prepared or certified part of the document or a related report or valuation.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25504.2. (a) Any accountant, engineer, appraiser, or other person whose profession gives authority to a statement made by such person, who pursuant to rule of the commissioner has given written consent to be and has been named in any prospectus or offering circular distributed in connection with the offer or sale of securities as having prepared or certified in such capacity either any part of such document or any written report or valuation which is distributed with or referred to in any such document is jointly and severally liable with any other person liable under Section 25501 if: (1) The part of such document so prepared or certified or the report or valuation so distributed or referred to includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and (2) The person asserting such liability acquired a security described in such document in reliance on such untrue statement or in reliance on such part of the document or on such report or valuation without notice of such omission. (b) Notwithstanding the provisions of subdivision (a), no such accountant, engineer, appraiser, or other person shall be liable as provided therein if such person sustains the burden of proof that: (1) Such person had, after reasonable investigation, reasonable ground to believe and did believe, at the time such person consented to such use of such person’s name, that the statements so included in such part of such document or in such report or valuation were true and that there was no omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or (2) Such part of such document did not fairly represent such person’s statement as an expert or was not a fair copy of or extract from such person’s report or valuation as an expert; or (3) Prior to the acquisition of the security by the person asserting the liability, such accountant, engineer, appraiser, or other person advised the issuer and the commissioner in writing that such person would not be responsible for such part of the document or the report or valuation. (c) A person who participates in the preparation of a document described in subdivision (a) of this section shall be deemed to have prepared or certified only those portions thereof which are expressly stated with such person’s written consent to have been made on such person’s authority. (Amended by Stats. 1978, Ch. 663.)
  152. 25505.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. )

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    A liable corporation may seek indemnification from certain officers, directors, and controlling persons, and liable persons may seek contribution from other liable persons, subject to stated exceptions.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25505. A corporation which is liable under this chapter shall have a right of indemnification against any of its principal executive officers, directors, and controlling persons whose willful violation of any provision of this law gave rise to such liability. All persons liable under this chapter shall have a right of contribution against all other persons similarly liable, based upon each person’s proportionate share of the total liability, except that no person whose willful violation of any provision of this law has given rise to any liability shall have any right of contribution against any other person guilty merely of a negligent violation, and except that no principal executive officer, director, or controlling person whose willful violation has given rise to any liability shall have any right of contribution against the corporation to which he sustains that relationship. (Repealed and added by Stats. 1968, Ch. 88.)
  153. 25506.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. )

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    This section sets time limits for suing to enforce certain securities liabilities: before January 1, 2005, the action had to be filed within 4 years of the violation or 1 year after discovery, whichever came first; on or after January 1, 2005, the limits are 5 years or 2 years after discovery, whichever comes first.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25506. (a) For proceedings commencing before January 1, 2005, no action shall be maintained to enforce any liability created under Section 25500, 25501, or 25502 (or Section 25504 or Section 25504.1 insofar as they related to those sections) unless brought before the expiration of four years after the act or transaction constituting the violation or the expiration of one year after the discovery by the plaintiff of the facts constituting the violation, whichever shall first expire. (b) For proceedings commencing on or after January 1, 2005, no action shall be maintained to enforce any liability created under Section 25500, 25501, or 25502 (or Section 25504 or Section 25504.1 insofar as they related to those sections) unless brought before the expiration of five years after the act or transaction constituting the violation or the expiration of two years after the discovery by the plaintiff of the facts constituting the violation, whichever shall first expire. (Amended by Stats. 2004, Ch. 575, Sec. 3. Effective January 1, 2005.)
  154. 25506.1.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. )

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    A lawsuit to enforce liability under Section 25504.2 must be filed within one year after discovering the violation, and never later than three years after the violating act or transaction.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25506.1. No action shall be maintained to enforce any liability created under Section 25504.2 unless brought within one year after the discovery of the facts constituting the violation, or after such discovery should have been made by the exercise of reasonable diligence. In no event shall any such action be brought more than three years after the act or transaction constituting the violation. (Added by Stats. 1977, Ch. 762.)
  155. 25507.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. )

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    This section limits when certain securities-liability actions may be brought, requires some buyers to receive and reject a commissioner-approved offer before suing, and lets the commissioner add investor-protection conditions.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25507. (a) No action shall be maintained to enforce any liability created under Section 25503 (or Section 25504 or Section 25504.1 insofar as they relate to that section) unless brought before the expiration of two years after the violation upon which it is based or the expiration of one year after the discovery by the plaintiff of the facts constituting such violation, whichever shall first expire. (b) No buyer may commence an action under Section 25503 (or Section 25504 or Section 25504.1 insofar as they relate to that section) if, before suit is commenced, such buyer shall have received a written offer approved as to form by the commissioner (1) stating the respect in which liability under such section may have arisen, (2) offering to repurchase the security for a cash price payable upon delivery of the security or offering to pay the buyer an amount in cash equal in either case to the amount recoverable by the buyer in accordance with Section 25503, or, offering to rescind the transaction by putting the parties back in the same position as before the transaction, (3) providing that such offer may be accepted by the buyer at any time within a specified period of not less than 30 days after the date of receipt thereof unless rejected earlier during such period by the buyer, (4) setting forth the provisions of this subdivision (b), and (5) containing such other information as the commissioner may require by rule or order, and such buyer shall have failed to accept such offer in writing within the specified period after receipt thereof. (c) The commissioner may by rule or order impose as a condition to approval of an offer under subdivision (b) of this section, if the commissioner finds such action is necessary and appropriate for the protection of investors, conditions requiring: (1) That equivalent and concurrent offers be made to all investors as to whom liability may have arisen and still exists under Section 25503 (or Section 25504 or Section 25504.1 insofar as they relate to that section) in connection with the distribution or transaction; (2) That the offer be made subject to a condition voiding such offer if the issuer, by reason of acceptances, is disabled from commencing or continuing business; (3) That the offer be made within a specified period after approval thereof by the commissioner; (4) If the consideration paid by the offeree was other than monetary or if the offer is of rescission, and if the offer is rejected by the offeree on the ground that it does not accord him the damages payable under Section 25503 or that the rescission offered does not place the parties back in the same position as before the transaction, that an offer so rejected shall not bar the commencement of an action by the offeree under Section 25503 (or Section 25504 or Section 25504.1 insofar as they relate to that section); or (5) That the offeror file a report or reports with the commissioner containing such information as he may require concerning the making of the offer, its acceptance or rejection, and compliance with its terms and conditions or with conditions imposed under this subdivision. (d) Each person who files a repurchase offer with the commissioner pursuant to subdivision (b) shall file with the commissioner, in such form as the commissioner by rule prescribes, an irrevocable consent appointing the commissioner or the commissioner’s successor in office to be such person’s attorney to receive service of any lawful process in any noncriminal suit, action or proceeding against such person or such person’s successor, executor or administrator, which arises under this law or any rule or order hereunder after the consent has been filed, with the same force and validity as if served personally on the person filing the consent. A person who has filed such a consent in connection with a qualification under this law (or application for a permit under any prior law if the application under this law states that such consent is still effective) need not file another. Service may be made by leaving a copy of the process in the office of the commissioner but it is not effective unless (1) the plaintiff, who may be the commissioner in a suit, action or proceeding instituted by him, forthwith sends notice of the service and a copy of the process by registered or certified mail to the defendant or respondent at such person’s last address on file with the commissioner, and (2) the plaintiff’s affidavit of compliance with this section is filed in the case on or before the return day of the process, if any, or within such further time as the court allows. (Amended by Stats. 1978, Ch. 663.)
  156. 25508.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. )

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    An action to enforce indemnification or contribution rights under Section 25505 must be brought within one year after the relevant final judgment.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25508. No action shall be maintained to enforce any right of indemnification or contribution created by Section 25505 unless brought before the expiration of one year after final judgment based upon the liability for which the right of indemnification or contribution exists. (Repealed and added by Stats. 1968, Ch. 88.)
  157. 25508.5.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. )

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    A purchaser of a viatical or life settlement contract may cancel or rescind the purchase for any reason within seven calendar days after paying the required consideration, and the issuer must refund all money within seven calendar days after receiving notice.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25508.5. In addition to any other rights provided for under this division, including, but not limited to, Sections 25501 and 25506, or otherwise, a person who purchases a viatical or life settlement contract or a fractionalized or pooled interest therein may rescind or cancel the purchase for any reason. The person may rescind or cancel the purchase at any time before seven calendar days after the date the person remits the required consideration to the issuer or the issuer’s agent by giving written notice of rescission or cancellation to the issuer or the issuer’s agent. No specific form is required for the rescission or cancellation. The notice is effective when personally delivered, deposited in the United States mail, or deposited with a commercial courier or delivery service. The issuer shall refund all the person’s money within seven calendar days after receiving the notice of rescission or cancellation. (Added by Stats. 2000, Ch. 705, Sec. 6. Effective January 1, 2001.)
  158. 25509.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. )

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    A cause of action under this chapter survives the death of a person who could have been a plaintiff or defendant.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25509. Every cause of action under this chapter survives the death of any person who might have been a plaintiff or defendant. (Repealed and added by Stats. 1968, Ch. 88.)
  159. 25510.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. )

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    Private parties generally cannot claim civil liability by implication from violations of this chapter, except where the chapter expressly provides otherwise.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 1. Civil Liability [25500 - 25510] ( Chapter 1 added by Stats. 1968, Ch. 88. ) ## 25510. Except as explicitly provided in this chapter, no civil liability in favor of any private party shall arise against any person by implication from or as a result of the violation of any provision of this law or any rule or order hereunder. Nothing in this chapter shall limit any liability which may exist by virture of any other statute or under common law if this law were not in effect. (Repealed and added by Stats. 1968, Ch. 88.)
  160. 25530.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 2. Powers of the Commissioner [25530 - 25536] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    The commissioner may sue in superior court to stop violations and seek compliance, and the court may grant injunctions and other relief.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 2. Powers of the Commissioner [25530 - 25536] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25530. (a) Whenever it appears to the commissioner that any person has engaged, is engaging, or is about to engage in any act or practice constituting a violation of any provision of this division or any rule or order hereunder, the commissioner may in the commissioner’s discretion bring an action in the name of the people of the State of California in the superior court to enjoin the acts or practices or to enforce compliance with this law or any rule or order hereunder. Upon a proper showing, a permanent or preliminary injunction, restraining order, or writ of mandate shall be granted and a receiver, monitor, conservator, or other designated fiduciary or officer of the court may be appointed for the defendant or the defendant’s assets, or any other ancillary relief may be granted as appropriate. A receiver, monitor, conservator, or other designated fiduciary or officer of the court appointed by the superior court pursuant to this section may, with the approval of the court, exercise any or all of the powers of the defendant’s officers, directors, partners, trustees or persons who exercise similar powers and perform similar duties, including the filing of a petition for bankruptcy. No action at law or in equity may be maintained by any party against the commissioner, or a receiver, monitor, conservator, or other designated fiduciary or officer of the court, by reason of their exercising these powers or performing these duties pursuant to the order of, or with the approval of, the superior court. (b) If the commissioner determines it is in the public interest, the commissioner may include in any action authorized by subdivision (a) a claim for ancillary relief, including but not limited to, a claim for restitution or disgorgement or damages on behalf of the persons injured by the act or practice constituting the subject matter of the action, and the court shall have jurisdiction to award additional relief. (c) In any case in which a defendant is ordered by the court to pay restitution to a victim, the court may in its order require the payment as a money judgment, which shall be enforceable by a victim as if the restitution order were a separate civil judgment, and enforceable in the same manner as is provided for the enforcement of any other money judgment. Any order issued under this subdivision shall contain provisions that are designed to achieve a fair and orderly satisfaction of the judgment. (Amended by Stats. 2013, Ch. 335, Sec. 7. (SB 538) Effective January 1, 2014.)
  161. 25530.1.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 2. Powers of the Commissioner [25530 - 25536] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    In proceedings under Section 25530, the court may bar a person who violated Section 25401 from serving as an officer or director of certain issuers if the person’s conduct shows unfitness.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 2. Powers of the Commissioner [25530 - 25536] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25530.1. In any proceeding under Section 25530, the court may prohibit, conditionally or unconditionally, and permanently or for such period of time as it shall determine, any person who violated Section 25401 from acting as an officer or director of any issuer that has securities qualified pursuant to Section 25110, or that has securities or a transaction exempt from qualification pursuant to Section 25100, 25102, or 25103, if the person’s conduct demonstrates unfitness to serve as an officer or director of the issuer. (Added by Stats. 2007, Ch. 101, Sec. 6. Effective January 1, 2008.)
  162. 25531.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 2. Powers of the Commissioner [25530 - 25536] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    The commissioner may investigate and publish violations, seize certain broker-dealer or investment adviser records for up to 30 days, and use subpoenas and court orders to get evidence. People generally cannot remove those records during the possession period, and compelled testimony gets limited immunity except for perjury or contempt.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 2. Powers of the Commissioner [25530 - 25536] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25531. (a) The commissioner in his discretion (1) may make such public or private investigations within or outside of this state as he deems necessary to determine whether any person has violated or is about to violate any provision of this law or any rule or order hereunder or to aid in the enforcement of this law or in the prescribing of rules and forms hereunder, and (2) may publish information concerning any violation of this law or any rule or order hereunder. (b) In making any investigation authorized by subdivision (a) of this section, the commissioner may, for a reasonable time not exceeding 30 days, take possession of the books, records, accounts and other papers pertaining to the business of any broker-dealer or investment adviser and place a keeper in exclusive charge of them in the place where they are usually kept. During such possession no person shall remove or attempt to remove any of the books, records, accounts, or other papers except pursuant to a court order or with the consent of the commissioner; but the directors, officers, partners, and employees of the broker-dealer or investment adviser may examine them, and employees shall be permitted to make entries therein reflecting current transactions. (c) For the purpose of any investigation or proceeding under this law, the commissioner or any officer designated by him may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records which the commissioner deems relevant or material to the inquiry. (d) In case of contumacy by, or refusal to obey a subpoena issued to, any person, the superior court, upon application by the commissioner, may issue to the person an order requiring him to appear before the commissioner, or the officer designated by him, there to produce documentary evidence, if so ordered, or to give evidence touching the matter under investigation or in question. Failure to obey the order of the court may be punished by the court as a contempt. (e) No person is excused from attending and testifying or from producing any document or record before the commissioner, or in obedience to the subpoena of the commissioner or any officer designated by him, or in any proceeding instituted by the commissioner, on the ground that the testimony or evidence (documentary or otherwise) required of him may tend to incriminate him or subject him to a penalty or forfeiture; but no individual may be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he is compelled, after validly claiming his privilege against self-incrimination, to testify or produce evidence (documentary or otherwise), except that the individual testifying is not exempt from prosecution and punishment for perjury or contempt committed in testifying. (Added by Stats. 1968, Ch. 88.)
  163. 25532.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 2. Powers of the Commissioner [25530 - 25536] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    The commissioner may issue stop orders and other enforcement orders against securities sellers, broker-dealers, investment advisers, and other persons violating the division or related rules.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 2. Powers of the Commissioner [25530 - 25536] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25532. (a) If, in the opinion of the commissioner, (1) the sale of a security is subject to qualification under this law and it is being or has been offered or sold without first being qualified, the commissioner may order the issuer or offeror of the security to desist and refrain from the further offer or sale of the security until qualification has been made under this law or (2) the sale of a security is subject to the requirements of Section 25100.1, 25101.1, or 25102.1 and the security is being or has been offered or sold without first meeting the requirements of those sections, the commissioner may order the issuer or offeror of that security to desist and refrain from the further offer or sale of the security until those requirements have been met. (b) If, in the opinion of the commissioner, a person has been or is acting as a broker-dealer or investment adviser, or has been or is engaging in broker-dealer or investment adviser activities, in violation of Section 25210, 25230, or 25230.1, the commissioner may order that person to desist and refrain from the activity until the person has been appropriately licensed or the required filing has been made under this law. (c) If, in the opinion of the commissioner, a person has violated or is violating Section 25401, the commissioner may order that person to desist and refrain from the violation. (d) If the commissioner determines that a person has engaged, is engaging, or is about to engage in an act, practice, or course of business constituting a violation of this division or a rule adopted or order issued under this division, the commissioner may issue an order directing the person to desist and refrain from engaging in the act, practice, or course of business, or take other action necessary or appropriate to comply with this division. (e) If the commissioner determines it is in the public interest, the commissioner may include in any administrative action brought under this division a claim for ancillary relief, including, but not limited to, a claim for restitution or disgorgement or damages on behalf of the persons injured by the act or practice constituting the subject matter of the action, and the administrative law judge shall have jurisdiction to award additional relief. (f) If, after an order has been served under subdivision (a), (b), (c), or (d), a request for hearing is filed in writing within 30 days of the date of service of the order by the person to whom the order was directed, a hearing shall be held in accordance with provisions of the Administrative Procedure Act, Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the commissioner shall have all of the powers granted under that chapter. Unless the hearing is commenced within 15 business days after the request is filed (or the person affected consents to a later date), the order is rescinded. If that person fails to file a written request for a hearing within 30 days from the date of service of the order, the order shall be deemed a final order of the commissioner and is not subject to review by any court or agency, notwithstanding Section 25609. The commissioner may file a certified copy of the final order with the clerk of the superior court or any court of competent jurisdiction. The order so filed has the same effect as a judgment of the court and may be recorded, enforced, or satisfied in the same manner as a judgment of the court. If a person does not comply with an order under this section, the commissioner may petition the superior court or any court of competent jurisdiction to enforce the order. The court may not require the commissioner to post a bond in an action or proceeding under this section. If the court finds, after service and opportunity for hearing, that the person was not in compliance with the order, the court may adjudge the person in civil contempt of the order. The court may impose a further civil penalty against the person for contempt and may grant any other relief the court determines is just and proper in the circumstances. (Amended by Stats. 2016, Ch. 277, Sec. 8. (AB 2907) Effective January 1, 2017.)
  164. 25533.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 2. Powers of the Commissioner [25530 - 25536] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    The commissioner may send evidence of violations to the Attorney General or county district attorney, and those prosecutors may bring criminal proceedings even without a referral.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 2. Powers of the Commissioner [25530 - 25536] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25533. The commissioner may refer any evidence available concerning any violation of this law or of any rule or order hereunder to the Attorney General or the district attorney of the county in which the violation occurred, who may, with or without this type of a reference, institute appropriate criminal proceedings under this law. The commissioner and his or her counsel, deputies, or assistants may, upon request of the Attorney General or the district attorney, assist the prosecuting attorney in presenting the law or facts at the trial. (Amended by Stats. 2003, Ch. 876, Sec. 1. Effective January 1, 2004.)
  165. 25533.5.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 2. Powers of the Commissioner [25530 - 25536] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    The commissioner must send a copy of a desist and refrain order to the Attorney General and the relevant district attorney.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 2. Powers of the Commissioner [25530 - 25536] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25533.5. The commissioner shall send a copy of a desist and refrain order issued under this law to the Attorney General and the district attorney of the county in which the person who is the subject of the order resides or maintains a principal place of business. There shall be no liability on the part of, and no cause of action of any nature shall arise against, the State of California, the department and its employees, the commissioner, the members of the commissioner’s staff, or the commissioner’s authorized representatives for the failure to provide to the Attorney General or the district attorney a copy of the order as required by this section. (Amended by Stats. 2003, Ch. 876, Sec. 2. Effective January 1, 2004.)
  166. 25534.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 2. Powers of the Commissioner [25530 - 25536] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    If the commissioner finds securities were offered or sold in violation of specified sections, the commissioner may order transfer-restricting legends on certificates, and the issuer must stamp them on outstanding certificates.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 2. Powers of the Commissioner [25530 - 25536] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25534. Whenever any securities are issued which the commissioner determines were offered or sold in violation of Section 25110, 25120, or 25130, the commissioner may, by written order to the issuer and notice to the holders of such securities, require certificates evidencing such securities to have stamped or printed prominently on their face a legend, in the form prescribed by rule of the commissioner, restricting the transfer of such securities. Upon receipt of the order, the issuer shall stamp or print such legend prominently on the face of all outstanding certificates subject to the order. If, after such order or notice has been given, a request for a hearing is filed in writing by the person or persons to whom such order or notice was addressed, a hearing shall be held in accordance with the provisions of the Administrative Procedure Act, Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the commissioner shall have all the powers granted thereunder; unless such hearing is commenced within 15 business days after the request for hearing is received by the commissioner (or the person or persons affected and the issuer consent to a later date), such order and notice are rescinded. (Amended by Stats. 1973, Ch. 390.)
  167. 25535.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 2. Powers of the Commissioner [25530 - 25536] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    A violator of this law or any related rule or order can be liable for a civil penalty of up to $25,000 per violation, enforced by the commissioner in a civil action.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 2. Powers of the Commissioner [25530 - 25536] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25535. (a) Any person who violates any provision of this law, or who violates any rule or order under this law, shall be liable for a civil penalty not to exceed twenty-five thousand dollars ($25,000) for each violation, which shall be assessed and recovered in a civil action brought in the name of the people of the State of California by the commissioner in any court of competent jurisdiction. (b) As applied to the penalties for acts in violation of this division, the remedies provided by this section and by other sections of this division are not exclusive, and may be sought and employed in any combination to enforce the provisions of this division. (c) No action shall be maintained to enforce any liability created under subdivision (a) unless brought before the expiration of four years after the act or transaction constituting the violation. (Amended by Stats. 1998, Ch. 391, Sec. 13. Effective January 1, 1999.)
  168. 25536.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 2. Powers of the Commissioner [25530 - 25536] ( Chapter 2 added by Stats. 1968, Ch. 88. )

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    The commissioner may take actions authorized by Section 6d of the federal Commodity Exchange Act, and this section does not limit the commissioner’s other powers.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 2. Powers of the Commissioner [25530 - 25536] ( Chapter 2 added by Stats. 1968, Ch. 88. ) ## 25536. (a) The commissioner may take such actions as are authorized by Section 6d of the federal Commodity Exchange Act (7 U.S.C. Sec. 1 et seq.) as amended before or after the effective date of this section. (b) Nothing in this section shall be construed as a limitation on the powers of the commissioner under this division or any other law administered by the commissioner. (Amended by Stats. 1984, Ch. 193, Sec. 11.)
  169. 25540.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 3. Crimes [25540 - 25542] ( Chapter 3 added by Stats. 1968, Ch. 88. )

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    This section sets criminal penalties for willfully violating securities-law provisions, rules, or orders.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 3. Crimes [25540 - 25542] ( Chapter 3 added by Stats. 1968, Ch. 88. ) ## 25540. (a) Except as provided for in subdivision (b), any person who willfully violates any provision of this division, or who willfully violates any rule or order under this division, shall upon conviction be fined not more than one million dollars ($1,000,000), or imprisoned pursuant to subdivision (h) of Section 1170 of the Penal Code, or in a county jail for not more than one year, or be punished by both that fine and imprisonment; but no person may be imprisoned for the violation of any rule or order if he or she proves that he or she had no knowledge of the rule or order. (b) Any person who willfully violates Section 25400, 25401, or 25402, or who willfully violates any rule or order under this division adopted pursuant to those provisions, shall upon conviction be fined not more than ten million dollars ($10,000,000), or imprisoned pursuant to subdivision (h) of Section 1170 of the Penal Code for two, three, or five years, or be punished by both that fine and imprisonment. (c) Any issuer, as defined in Section 2 of the Sarbanes-Oxley Act of 2002 (Public Law 107-204), who willfully violates Section 25400, 25401, or 25402, or who willfully violates any rule or order under this division adopted pursuant to those provisions, shall upon conviction be fined not more than twenty-five million dollars ($25,000,000), or imprisoned pursuant to subdivision (h) of Section 1170 of the Penal Code for two, three, or five years, or be punished by both that fine and imprisonment. (Amended by Stats. 2011, Ch. 15, Sec. 47. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)
  170. 25541.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 3. Crimes [25540 - 25542] ( Chapter 3 added by Stats. 1968, Ch. 88. )

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    A person who willfully commits securities fraud, or an issuer that willfully violates that rule, can be convicted and fined or imprisoned.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 3. Crimes [25540 - 25542] ( Chapter 3 added by Stats. 1968, Ch. 88. ) ## 25541. (a) Any person who willfully employs, directly or indirectly, any device, scheme, or artifice to defraud in connection with the offer, purchase, or sale of any security or willfully engages, directly or indirectly, in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person in connection with the offer, purchase, or sale of any security shall upon conviction be fined not more than ten million dollars ($10,000,000), or imprisoned pursuant to subdivision (h) of Section 1170 of the Penal Code for two, three, or five years, or be punished by both that fine and imprisonment. (b) Any issuer, as defined in Section 2 of the Sarbanes-Oxley Act of 2002 (Public Law 107-204), who willfully violates subdivision (a) shall upon conviction be fined not more than twenty-five million dollars ($25,000,000), or imprisoned pursuant to subdivision (h) of Section 1170 of the Penal Code for two, three, or five years, or be punished by both that fine and imprisonment. (Amended by Stats. 2011, Ch. 15, Sec. 48. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)
  171. 25542.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 3. Crimes [25540 - 25542] ( Chapter 3 added by Stats. 1968, Ch. 88. )

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    This section says the law does not limit the state’s power to punish conduct that is a crime under another statute.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 3. Crimes [25540 - 25542] ( Chapter 3 added by Stats. 1968, Ch. 88. ) ## 25542. Nothing in this law limits the power of the state to punish any person for any conduct which constitutes a crime under any other statute. (Added by Stats. 1968, Ch. 88.)
  172. 25550.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 4. Service of Process [25550- 25550.] ( Chapter 4 added by Stats. 1968, Ch. 88. )

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    This section allows service of process on the commissioner when a person engaged in prohibited or actionable conduct cannot otherwise be served in California, but the service is only effective if notice and an affidavit are filed as required.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 6. ENFORCEMENT [25500 - 25550] ( Part 6 added by Stats. 1968, Ch. 88. ) ## CHAPTER 4. Service of Process [25550- 25550.] ( Chapter 4 added by Stats. 1968, Ch. 88. ) ## 25550. When any person, including any nonresident of this state, engages in conduct prohibited or made actionable by this law or any rule or order hereunder, whether or not he has filed a consent to service of process under subdivision (h) of Section 25102, Section 25165, or Section 25240, and personal jurisdiction over him cannot otherwise be obtained in this state, that conduct shall be considered equivalent to his appointment of the commissioner or his successor in office to be his attorney to receive service of any lawful process in any noncriminal suit, action, or proceeding against him or his successor, executor, or administrator which grows out of that conduct and which is brought under this law or any rule or order hereunder, with the same force and validity as if served on him personally. Service may be made by leaving a copy of the process in the office of the commissioner, but it is not effective unless (a) the plaintiff, who may be the commissioner in a suit, action, or proceeding instituted by him, forthwith sends notice of the service and a copy of the process by registered or certified mail to the defendant or respondent at his last known address or takes other steps which are reasonably calculated to give actual notice, and (b) the plaintiff’s affidavit of compliance with this section is filed in the case on or before the return day of the process, if any, or within such further time as the court allows. (Amended by Stats. 1973, Ch. 390.)
  173. 25604.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    The department’s administration, enforcement, and public education activities are funded from the State Corporations Fund, using appropriations that may come from certain fees.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25604. The administration and enforcement of, and the education of the public relative to, the laws and programs of the Department of Financial Protection and Innovation shall be supported from the State Corporations Fund. Funds appropriated from the State Corporations Fund and made available for expenditure for any law or program of the department may come from fees collected from the following: (a) Section 25608, except for fees collected pursuant to subdivisions (o) to (r), inclusive, of Section 25608. (b) Section 25608.1. (Amended by Stats. 2022, Ch. 452, Sec. 79. (SB 1498) Effective January 1, 2023.)
  174. 25605.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    The commissioner may publish information if it is in the public interest, but commissioner staff may not use nonpublic information for personal benefit and may disclose withheld information only in limited situations.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25605. (a) The commissioner may publish any information filed with him or obtained by him, if, in the judgment of the commissioner, such action is in the public interest. No provision of this law authorizes the commissioner or any of his assistants, clerks, or deputies to disclose any information withheld from public inspection except among themselves or when necessary or appropriate in a proceeding or investigation under this law or to other federal or state regulatory agencies. No provision of this law either creates or derogates from any privilege which exists at common law or otherwise when documentary or other evidence is sought under a subpoena directed to the commissioner or any of his assistants, clerks, or deputies. (b) It is unlawful for the commissioner or any of his assistants, clerks, or deputies to use for personal benefit any information which is filed with or obtained by the commissioner and which is not then generally available to the public. (Amended by Stats. 1970, Ch. 1231.)
  175. 25606.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    The Attorney General must give the commissioner legal opinions on questions of law within the commissioner’s jurisdiction, and must act as the commissioner’s attorney when requested. Certain Government Code sections do not apply to the Commissioner of Financial Protection and Innovation.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25606. (a) The Attorney General shall render to the commissioner opinions upon all questions of law, relating to the construction or interpretation of any law under the commissioner’s jurisdiction or arising in the administration thereof, that may be submitted to the Attorney General by the commissioner, and upon the commissioner’s request shall act as the attorney for the commissioner in actions and proceedings brought by or against the commissioner under or pursuant to any provision of any law under the commissioner’s jurisdiction. (b) Sections 11041, 11042, and 11043 of the Government Code do not apply to the Commissioner of Financial Protection and Innovation. (Amended by Stats. 2022, Ch. 452, Sec. 80. (SB 1498) Effective January 1, 2023.)
  176. 25607.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    The commissioner and certain staff generally must not have specified business or employment interests in persons regulated under this division, but limited securities holdings or purchases are allowed if the stated conditions are met.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25607. (a) Neither the commissioner nor any of the commissioner’s assistants, clerks, or deputies shall be interested as a director, officer, shareholder, member (other than a member of an organization formed for religious purposes), partner, agent, or employee of any person who, during the period of the official’s or employee’s association with the Department of Financial Protection and Innovation, (1) was licensed or applied for license as a broker-dealer or investment adviser under this division, or (2) applied for or secured the qualification of the sale of securities under this division. (b) Nothing contained in subdivision (a) shall prohibit the holding or purchasing of any securities by any assistant, clerk, or deputy in accordance with rules as the commissioner shall adopt for the purpose of protecting the public interest and avoiding conflicts of interest. (c) Nothing contained in subdivision (a) shall prohibit the holding or purchasing of any securities by the commissioner if any of the following criteria is met: (1) The securities held or purchased by the commissioner are exempt from the qualification requirements of Sections 25110, 25120, and 25130 by virtue of Section 25100, provided that the holding or purchasing of those securities is in accordance with rules adopted for the purpose of protecting the public interest and avoiding conflicts of interest. (2) The securities held or purchased by the commissioner are not subject to Sections 25110, 25120, and 25130 by virtue of Section 25100.1, provided that the holding or purchasing of those securities is in accordance with rules adopted for the purpose of protecting the public interest and avoiding conflicts of interest. (3) The holding or purchasing of any securities by the commissioner meets each of the following requirements: (A) The securities are held or purchased through a management account or trust administered by a bank or trust company authorized to do business in this state, and the bank or trust company has sole investment discretion regarding the holding, purchase, and sale of securities. (B) The commissioner did not, directly or indirectly, advise, counsel, command, or suggest the holding, purchase, or sale of any security or furnish any information relating to the security to the bank or trust company. (C) The account or trust does not at any time have more than 10 percent of its total assets invested in the securities of any one issuer or hold more than 5 percent of the outstanding shares or units of any class of securities of any one issuer. (D) The commissioner shall report to the Attorney General not less often than quarterly all holdings, purchases, and sales of securities by the commissioner as authorized in paragraph (3), which reports shall be retained by the Attorney General as public documents. (Amended by Stats. 2022, Ch. 452, Sec. 81. (SB 1498) Effective January 1, 2023.)
  177. 25608.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    This section sets filing fees, annual fees, assessments, and related charges for securities-related filings and regulated firms, and gives the commissioner authority to collect, assess, suspend, revoke, and enjoin for nonpayment.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25608. (a) The commissioner shall charge and collect the fees fixed in this section and Section 25608.1. All fees charged and collected under this section and Section 25608.1 shall be transmitted to the Treasurer at least weekly, accompanied by a detailed statement thereof and shall be credited to the Financial Protection Fund. (b) The fee for filing an application for a negotiating permit under subdivision (c) of Section 25102 is fifty dollars ($50). (c) The fee for filing a notice pursuant to paragraph (5) of subdivision (h) of Section 25102, for filing a notice pursuant to paragraph (4) of subdivision (f) of Section 25102, or for filing a notice pursuant to paragraph (10) of subdivision (r) of Section 25102, in addition to the fee prescribed in those paragraphs, if applicable, shall be determined based on the value of the securities proposed to be sold in the transaction for which the notice is filed and in accordance with subdivision (g), and shall be as follows: Value of Securities Proposed to be Sold Filing Fee $25,000 or less $ 25 $25,001 to $100,000 $ 35 $100,001 to $500,000 $ 50 $500,001 to $1,000,000 $150 Over $1,000,000 $300 (d) The fee for filing an application for designation of an issuer pursuant to subdivision (k) of Section 25100 is fifty dollars ($50). (e) The fee for filing an application for qualification of the sale of securities by notification under Section 25112 or by permit under paragraph (1) of subdivision (b) of Section 25113 (except applications for qualification by permit of the sale of any guarantee of any security, the fees for which applications are fixed in subdivision (k)) is two hundred dollars ($200) plus one-fifth of 1 percent of the aggregate value of the securities sought to be sold in this state up to a maximum aggregate fee of two thousand five hundred dollars ($2,500). The fee for filing a small company application for qualification of the sale of securities by permit under paragraph (2) of subdivision (b) of Section 25113 is two thousand five hundred dollars ($2,500). In the case where the costs of processing a small company application exceed the filing fee, an additional fee shall be charged, not to exceed one thousand dollars ($1,000), over and above the filing fee based on the costs of the salary or other compensation paid to persons processing the application plus overhead costs reasonably incurred in the performance of the work. In determining the costs, the commissioner may use the estimated average hourly cost for all persons processing applications for the fiscal year. (f) The fee for filing an application for qualification of the sale of securities by coordination under Section 25111 or a notice of intention to sell under subdivision (t) of Section 25100 is two hundred dollars ($200) plus one-fifth of 1 percent of the aggregate value of the securities sought to be sold in this state up to a maximum aggregate fee of two thousand five hundred dollars ($2,500). (g) For the purpose of determining the fees fixed in subdivisions (e) and (f): (1) The value of the securities shall be the price at which the company proposes to sell the securities, or the value, as alleged in the application, or the actual value, as determined by the commissioner, of the consideration (if other than money) to be received in exchange therefor, or of the securities when sold, whichever is greater. (2) Interim or voting trust certificates shall have a value equal to the aggregate value of the securities to be represented by the interim or voting trust certificates. (3) The value of a warrant or right to purchase or subscribe to another security of the same or another issuer shall be an amount equal to the consideration to be paid for that warrant or right plus an amount equal to the consideration to be paid upon purchase of the additional securities, provided that if the latter amount is not determinable at the time of qualification, that amount shall then be the value of the additional securities as determined by the commissioner. (4) In the case of a share dividend where the shareholders are given an option to accept either cash or additional shares of common stock, the value of the securities to be sold shall be the maximum amount of cash that would be payable in the event that all shareholders elected to accept cash. (h) The fee for filing an application for qualification of the sale of securities by permit under Section 25121 is: (1) Two hundred dollars ($200) in connection with any change (including any stock split or reverse stock split or stock dividend, except a stock dividend where the shareholders are given an option to accept either cash or additional shares of common stock) in the rights, preferences, privileges, or restrictions of or on outstanding securities. (2) Two hundred dollars ($200) plus one-fifth of 1 percent of the value, as alleged in the application, or the actual value, as determined by the commissioner, of the consideration to be received in exchange therefor, up to a maximum aggregate fee of two thousand five hundred dollars ($2,500), in any exchange of securities by the issuer with its existing security holders exclusively, or in any exchange in connection with any merger or consolidation or purchase of corporate assets in consideration of the issuance of securities, or any entity conversion transaction. (i) The fee for filing an application for qualification of the sale of securities by notification under Section 25131 shall be one hundred dollars ($100). (j) The fee for an application for the removal of any condition under Section 25141 is fifty dollars ($50). (k) The fee for filing any application for a permit to execute or issue any guarantee of any security is fifty dollars ($50). (l) The fee for acting as escrowholder for securities under Section 25149 is fifty dollars ($50). In addition, a fee of two dollars and fifty cents ($2.50) shall be paid for the deposit with the commissioner of each new certificate or other document resulting from a transfer in escrow. (m) The fee for filing an application for an order (1) consenting to the transfer in escrow of securities or (2) consenting to the transfer of securities subject to any condition imposed by the commissioner requiring the commissioner’s consent to the transfer is twenty dollars ($20) for each transfer. (n) The filing fee for an amendment to an application filed after the effective date of the qualification of the sale of securities is fifty dollars ($50) plus any additional fee that would have been required to be paid with the original application for qualification of the sale of securities under this section if the matters set forth in the amendment had been included in the original application. (o) (1) The fee for filing an application for a broker-dealer certificate under Section 25211 is three hundred dollars ($300). (2) Each broker-dealer shall pay to the commissioner its pro rata share of all costs and expenses, reasonably incurred in the administration of the broker-dealer program under this division, as estimated by the commissioner for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made. The pro rata share shall be the proportion that the broker-dealer and the number of its agents in this state bears to the aggregate number of broker-dealers and agents in this state as shown by records maintained by or on behalf of the commissioner. The pro rata share may include the costs of any examinations, audit, or investigation provided for in subdivision (r). (3) Every broker-dealer who has secured from the commissioner a certificate shall, in order to keep the certificate in effect for an additional period, pay a minimum assessment of seventy-five dollars ($75) on or before the 31st of December in each year. (4) The commissioner may assess and levy against each broker-dealer any additional amount above the minimum assessment amount of seventy-five dollars ($75) that is reasonable and necessary to support the broker-dealer program under this division. If an additional amount is assessed, the commissioner shall notify each broker-dealer by mail of any additional amount assessed and levied against it on or before the 30th day of May in each year, and that amount shall be paid within 20 days thereafter. If payment is not made within 20 days, the commissioner shall assess and collect a penalty in addition to the assessment of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld. (5) If a broker-dealer fails to pay any assessment on or before the 30th day of the month following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the broker-dealer. If, after that order is made, a request for hearing is filed in writing and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a broker-dealer shall not conduct business pursuant to this division except as may be permitted by order of the commissioner; provided, however, that the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided under this division. (6) In determining the amount assessed, the commissioner shall consider all appropriations from the Financial Protection Fund for the support of the broker-dealer program under this division and all reimbursements applicable to the administration of the broker-dealer program under this division. (p) (1) The commissioner shall charge a fee of fifty dollars ($50) for the filing of a notice or report required by rules adopted pursuant to subdivision (b) of Section 25210 or subdivision (b) of Section 25230. (2) The commissioner shall charge a fee up to fifty dollars ($50) to keep in effect for the following year any notice or report required by rules adopted pursuant to subdivision (b) of Section 25210 or subdivision (b) of Section 25230. (3) No person shall, on behalf of a broker-dealer licensed pursuant to Section 25211, effect any transaction in, or induce or attempt to induce the purchase or sale of, any security in this state unless the broker-dealer pays the annual fee required by paragraph (2) of this subdivision on or before the day upon which payment is due. (4) No person may, in this state, on behalf of an investment adviser licensed pursuant to Section 25231, offer or negotiate for the sale of investment advisory services of the investment adviser, determine which recommendations shall be made to, make recommendations to, or manage the accounts of, clients of the investment adviser, or determine the reports or analyses concerning securities to be published by the investment adviser, unless the investment adviser pays the annual fee required by paragraph (2) on or before the day upon which payment is due. (5) The commissioner may by order summarily enjoin an individual from performing any activity under paragraph (3) or (4) if the annual fee in paragraph (2) is not paid on or before the day upon which payment is due. An order under this paragraph may not be made before 10 days after notice by the commissioner that the fee is due and unpaid. (q) (1) Except as provided for in paragraph (2), the fee for filing an application for an investment adviser under Section 25231 is one hundred twenty-five dollars ($125), and payment of this amount shall keep the certificate, if granted, in effect during the calendar year during which it is granted. Every investment adviser who has secured from the commissioner a certificate shall, in order to keep the certificate in effect for an additional period, pay a renewal fee of one hundred twenty-five dollars ($125) on or before the 31st day of December. (2) Paragraph (1) shall not apply to a broker-dealer licensed under Section 25210. (r) (1) Except as provided for in paragraph (2), the fee for any routine or nonroutine regulatory examination, audit, or investigation is the amount of the salary or other compensation paid to the persons making the examination, audit, or investigation plus the amount of expenses including overhead reasonably incurred in the performance of the work. In determining the costs associated with an examination, audit, or investigation, the commissioner may use the estimated average hourly cost for all persons performing examinations, audits, or investigations for the fiscal year. (2) An investment adviser licensed under Section 25230 pursuant to the Investment Adviser Registration Depository shall not be subject to paragraph (1) only in regard to the fee for a routine regulatory examination of its investment advisory services for which it is licensed under Section 25230. (s) The fee for any hearing held by the commissioner pursuant to Section 25142 shall be the sum determined by the commissioner to cover the actual expense of noticing and holding the hearing. (t) The commissioner may fix by rule a reasonable charge for any publications issued under the commissioner’s authority. The charges shall not apply to reports of the commissioner in the ordinary course of distribution. (u) The fee for filing an offer under subdivision (b) of Section 25507 shall be the amount of filing fee payable under subdivision (e), (f), (h), or (i) of this section if an application had been filed to qualify the transaction in which the securities upon which the offer is to be made were sold in violation of the qualification provisions of this law. (v) The fee for filing an application for exemption pursuant to subdivision (l) of Section 25100 is two hundred fifty dollars ($250). (w) The commissioner may by rule require payment of a fee for filing a notice or report required by a rule adopted pursuant to Section 25105. The fee required in connection with a transaction as defined by that rule shall not exceed the fees specified in subdivision (c) based on the value of the securities sold, but the commissioner may permit a single notice for more than one transaction. (x) The fee for filing the first notice of transaction under subdivision (n) of Section 25102 is six hundred dollars ($600). (y) The fee for filing a notice of transaction under subdivision (o) of Section 25102 shall be the fee for filing an application for qualification of the sale of securities by permit under paragraph (1) of subdivision (b) of Section 25113 as set forth in subdivision (e) of this section. (z) The fee for filing a notice of transaction under subdivision (h) of Section 25103 shall be six hundred dollars ($600). (Amended by Stats. 2025, Ch. 20, Sec. 5. (AB 137) Effective June 30, 2025.)
  178. 25608.1.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    This section sets filing fees for certain securities notices and lets the commissioner charge an additional fee and, if payment is late, enjoin activity after notice.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25608.1. (a) The fee for an investment company filing a notice pursuant to subdivision (b) of Section 25100.1 is two hundred dollars ($200) plus one-fifth of 1 percent of the aggregate value of the securities sought to be sold in this state up to a maximum aggregate fee of two thousand five hundred dollars ($2,500). (b) The fee for an issuer filing a notice pursuant to subdivision (a) of Section 25102.1 is six hundred dollars ($600). (c) The fee for an issuer filing a notice pursuant to subdivision (d) of Section 25102.1 is three hundred dollars ($300). (d) (1) The fee for an investment adviser filing a notice pursuant to subdivision (b) of Section 25230.1 is one hundred twenty-five dollars ($125) and the fee for filing a notice or report required by rules adopted pursuant to subdivision (c) of Section 25230.1 is twenty-five dollars ($25). (2) The commissioner may charge a fee up to thirty-five dollars ($35) to keep in effect for the following year any notice or report required by rules adopted pursuant to subdivision (b) of Section 25210 or subdivision (b) of Section 25230. (3) The commissioner may by order summarily enjoin an individual from performing any activity under subdivision (c) of Section 25230.1 if the annual fee required by paragraph (2) is not paid on or before the day upon which payment is due. An order under this paragraph may not be made before 10 days after notice by the commissioner that the fee is due and unpaid. (Amended by Stats. 2013, Ch. 335, Sec. 10. (SB 538) Effective January 1, 2014.)
  179. 25608.2.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    The commissioner sets specified notice filing fees for the upcoming fiscal year by about June 1 each year, and may set them below the maximum amounts.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25608.2. Commencing July 1, 2000, the fee provisions of subdivision (c) of Section 25608, as they apply to the fee for filing a notice pursuant to paragraph (4) of subdivision (f) of Section 25102, and the fee provisions of subdivisions (a), (b), and (c) of Section 25608.1, shall be the maximum fees that may be levied on a notice filing under subdivision (b) of Section 25100.1, subdivision (f) of Section 25102, and subdivisions (a), (c), and (d) of Section 25102.1. The commissioner, however, may set the notice filing fee under subdivision (c) of Section 25608, as it relates to a notice filing under subdivision (f) of Section 25102, and the notice filing fees under subdivisions (a), (b), and (c) of Section 25608.1, at amounts below the maximum fees set forth in those sections. The commissioner shall set the notice filing fees under those sections for the upcoming fiscal year on or about June 1 of each year. If the commissioner fails to set the notice filing fees for the upcoming fiscal year, then the filing fees shall be the maximum fees that may be levied under those sections for the upcoming fiscal year. (Amended by Stats. 2001, Ch. 264, Sec. 7. Effective January 1, 2002.)
  180. 25608.3.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    The commissioner may set certain fees below the statutory maximum, and must set annual fee levels and make specified reductions or suspensions. The department must also report fee and fund-balance impacts to legislative budget committees on set dates.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25608.3. (a) Notwithstanding Sections 25608 and 25608.1, the commissioner may set any fee under those sections at an amount below the maximum fee set forth in those sections. The commissioner shall set the fee for the upcoming fiscal year on or about June 1 of each year, except that for the six-month period of January 1, 2002, through June 30, 2002, and for the 2002–03 fiscal year, the commissioner, on January 1, 2002, shall, in a reasonable and prudent manner, reduce any fee under Sections 25608 and 25608.1 by an amount below the maximum fee set forth in those sections. For the fiscal year commencing on July 1, 2003, and thereafter, the commissioner shall establish the level of fees adequate to cover anticipated costs, including the maintenance of a prudent reserve, but not to exceed the maximum fees that may be levied under Sections 25608 and 25608.1. If, for the fiscal year commencing on July 1, 2003, or thereafter, the commissioner fails to set the fee for the upcoming fiscal year on or before June 1, then the fee for the next fiscal year shall be the fee that was in effect for the current fiscal year. (b) In carrying out this section, the commissioner shall reduce or suspend fees to achieve no more than a 25-percent fund balance in the State Corporations Fund by June 30, 2007, and thereafter. (c) The department shall report by February 1, 2002, to the Chair of the Joint Legislative Budget Committee and the chairs of the budget committees on the fees to be reduced and the projected revenue and fund balance impact on the State Corporations Fund through the 2006–07 fiscal year. Each year from 2002 through 2007, the department shall submit a status update report by November 1 on the fees reduced, the revenue and fund balance impact in the prior fiscal year, and the projected revenue and fund balance impact through the 2006–07 fiscal year. (Added by Stats. 2001, Ch. 118, Sec. 1. Effective July 30, 2001.)
  181. 25609.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    The commissioner's final orders, decisions, licenses, and other official acts are subject to judicial review.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25609. Every final order, decision, license, or other official act of the commissioner is subject to judicial review in accordance with law. (Added by Stats. 1968, Ch. 88.)
  182. 25610.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    The commissioner may issue, change, or cancel rules, forms, and orders needed to carry out this law, classify securities and related matters, set different requirements for different classes, and waive requirements when not needed for the public interest or investor protection.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25610. The commissioner may from time to time make, amend and rescind such rules, forms, and orders as are necessary to carry out the provisions of this law, including rules and forms governing applications and reports, and defining any terms, whether or not used in this law, insofar as the definitions are not inconsistent with the provisions of this law. For the purpose of rules and forms, the commissioner may classify securities, persons, and matters within his jurisdiction, and may prescribe different requirements for different classes. The commissioner may in his discretion waive any requirement of any rule or form in situations where in his opinion such requirement is not necessary in the public interest or for the protection of investors. (Added by Stats. 1968, Ch. 88.)
  183. 25611.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    The commissioner may prepare and share certain securities lists with interested persons and may charge reasonable fees for them.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25611. The commissioner may prepare and make available to interested persons lists of persons whose securities are qualified for trading purposes in this state, are exempt from qualification, or are not subject to qualification as the commissioner may determine to be necessary or desirable, and the commissioner may make reasonable charges for those lists to defray the expenses of preparation and dissemination. (Amended by Stats. 1998, Ch. 48, Sec. 8. Effective January 1, 1999.)
  184. 25612.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    The commissioner may make, amend, or rescind a rule, form, or order only if the commissioner finds it is necessary or appropriate for the public interest or investor protection and consistent with the law’s purposes.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25612. No rule, form or order may be made, amended, or rescinded unless the commissioner finds that the action is necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by the policy and provisions of this law. (Amended by Stats. 1995, Ch. 596, Sec. 1. Effective January 1, 1996.)
  185. 25612.3.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    Unless a rule says otherwise, the commissioner must require specified forms to be used for broker-dealer, investment adviser, withdrawal, and securities industry registration or termination filings.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25612.3. Unless otherwise provided by rule, the commissioner shall require the use of the following forms: (a) Form BD (Uniform Application for Broker-Dealer Registration) for a broker-dealer application. (b) Form ADV (Uniform Application for Investment Adviser Registration) for an investment adviser application. (c) Form BDW (Uniform Request for Broker-Dealer Withdrawal) for withdrawing from licensure as a broker-dealer. (d) Form ADV-W (Notice of Withdrawal from Registration as an Investment Adviser) for withdrawing from licensure as an investment adviser. (e) Form U4 (Uniform Application for Securities Industry Registration or Transfer) for the reporting of an agent of a broker-dealer or an investment adviser representative or associated person of an investment adviser. (f) Form U5 (Uniform Termination Notice for Securities Industry Registration) for the reporting of the termination of an agent of a broker-dealer or an investment adviser representative or associated person of an investment adviser. (Amended by Stats. 2019, Ch. 143, Sec. 51. (SB 251) Effective January 1, 2020.)
  186. 25612.5.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    The commissioner may cooperate with various securities, law-enforcement, and regulatory bodies, and the section defines “electronic record” by reference to the Civil Code.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25612.5. (a) To encourage uniform interpretation and administration of this law and the Franchise Investment Law (Division 5 (commencing with Section 31000)) and effective securities and franchise regulation and enforcement, the commissioner may cooperate with the securities agencies or administrators of one or more states, Canadian provinces or territories, or other countries, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Securities Investor Protection Corporation, any self-regulatory organization, any national or international organization or securities officials or agencies, and any governmental law enforcement or regulatory agency. (b) The cooperation authorized by subdivision (a) includes, but is not limited to, the following actions: (1) Prescribing rules and forms with a view to achieving maximum uniformity in the form and content of registration statements, applications, and reports wherever practicable. (2) Participating in a nationwide central depository for qualification or registration of securities under this law and for documents or records required or allowed to be maintained under this law. (3) Participating in the Central Registration Depository, or any successor or alternative nationwide or regional depository, for the registering, certifying, or licensing of broker-dealers or agents, or both. (4) Participating in the Investment Adviser Registration Depository, or any successor or alternative nationwide or regional depository, for the registering, certifying, or licensing of investment advisers or investment adviser representatives, or both. (5) Cooperating in any regulatory activity necessary in the administration of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56; USA Patriot Act), consistent with state law. (c) Notwithstanding any other provision of law, any application for qualification, amendment to the application or related securities qualification or registration document or notice under Sections 25100.1, 25101.1, 25102, 25102.1, 25110, 25120, 25130, and 25230.1 or record otherwise required to be signed that is filed in this state as an electronic record pursuant to a nationwide central depository for qualification or registration of securities, or any electronic record filed through the Central Registration Depository or the Investment Adviser Registration Depository, shall be deemed to be a valid original document upon reproduction to paper form by the Department of Financial Protection and Innovation. (d) For purposes of this section, “electronic record” has the same meaning as in subdivision (g) of Section 1633.2 of the Civil Code. (Amended by Stats. 2022, Ch. 452, Sec. 82. (SB 1498) Effective January 1, 2023.)
  187. 25613.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    The commissioner may set rules or orders about financial statement form, when consolidated statements must be filed, and when statements must be audited.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25613. The commissioner may by rule or order prescribe (1) the form and content of financial statements required under this law, (2) the circumstances under which consolidated financial statements shall be filed, and (3) the circumstances under which financial statements shall be audited by independent certified public accountants or public accountants. (Added by Stats. 1968, Ch. 88.)
  188. 25614.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    The commissioner must make, amend, or rescind rules under the Administrative Procedure Act, except for rules only about the Department’s internal administration. Rules may also be adopted before this law takes effect if they become effective on that date.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25614. All rules of the commissioner (other than those relating solely to the internal administration of the Department of Financial Protection and Innovation) shall be made, amended, or rescinded in accordance with the provisions of the Administrative Procedure Act, Chapter 4 (commencing with Section 11370) of Part 1 of Division 3 of Title 2 of the Government Code. Rules may be adopted prior to the effective date of this law to become effective upon its effective date. (Amended by Stats. 2022, Ch. 452, Sec. 83. (SB 1498) Effective January 1, 2023.)
  189. 25615.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    A document counts as filed when the commissioner receives it, and a securities-sale qualification does not take effect until the appropriate fee is paid.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25615. A document is filed when it is received by the commissioner; but no qualification of the sale of securities shall become effective until the appropriate fee has been paid. (Added by Stats. 1968, Ch. 88.)
  190. 25616.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    The commissioner must keep an index of certain effective qualifications, denial/suspension/revocation orders, and permits and certificates issued under this law.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25616. The commissioner shall keep an index of all qualifications which are or have ever been effective, all denial, suspension, or revocation orders which have been entered and all permits and certificates which have been issued by him under this law. (Added by Stats. 1968, Ch. 88.)
  191. 25617.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    The commissioner must provide copies of public records on request, may charge reasonable fees set by rule, and must not charge public officers for copies used in their official duties.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25617. Upon request and at such reasonable charges as he prescribes by rule, the commissioner shall furnish to any person photostatic or other copies (certified under his seal of office if requested) of any document which is retained as a matter of public record, except that he shall not charge or collect any fee for photostatic or other copies of any document furnished to public officers for use in their official capacity. In any judicial proceeding or prosecution, any copy so certified is prima facie evidence of the contents of the document certified. (Added by Stats. 1968, Ch. 88.)
  192. 25618.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    The commissioner may, in discretion, honor requests from interested persons for interpretive opinions.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25618. The commissioner in his discretion may honor requests from interested persons for interpretive opinions. (Added by Stats. 1968, Ch. 88.)
  193. 25619.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    The commissioner may destroy certain records after the stated waiting periods, but only with required approval and while keeping specified permanent records.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25619. (a) The commissioner may destroy any applications, notices, orders, permits, and revoked or surrendered certificates, together with the files and folders, as useless or obsolete, four years after the date of filing or issuance, with the approval of the Department of General Services; provided, that a permanent record shall be maintained of any disciplinary action taken by the commissioner. (b) When acting as escrow holder for securities, the commissioner may destroy any certificates evidencing securities of any corporation which has been dissolved or whose charter has been suspended for a period of not less than two years for nonpayment of taxes or penalties and may destroy any other records pertaining to the escrow of the securities destroyed, and he or she shall have no further liability or accountability therefor; provided, that the commissioner shall maintain a permanent record containing such information as he or she may by rule prescribe relating to the certificates and records so destroyed. (c) Copies on microfilm or in other form which may be retained by the commissioner in his discretion of any records destroyed under this section shall be accepted for all purposes as equivalent to the original when certified by the commissioner. (Amended by Stats. 1997, Ch. 391, Sec. 35. Effective January 1, 1998.)
  194. 25620.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. )

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    The commissioner may set by rule or order when electronic records or electronic signatures will be accepted, but is not required to accept them.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 7. ADMINISTRATION [25604 - 25620] ( Part 7 added by Stats. 1968, Ch. 88. ) ## 25620. (a) Notwithstanding any other law, the commissioner may by rule or order prescribe circumstances under which to accept electronic records or electronic signatures. This section does not require the commissioner to accept electronic records or electronic signatures. (b) For purposes of this section, the following terms have the following meanings: (1) “Electronic record” means a record created, generated, sent, communicated, received, or stored by electronic means. “Electronic record” also includes, but is not limited to, all of the following: (A) An application, amendment, supplement, and exhibit, filed for any qualification, registration, order, permit, certificate, license, consent, or other authority. (B) A financial statement, report, or advertising. (C) An order, permit, certificate, license, consent, or other authority. (D) A notice of public hearing, accusation, and statement of issues in connection with any application, qualification, registration, order, permit, certificate, license, consent, or other authority. (E) A proposed decision of a hearing officer and a decision of the commissioner. (F) The transcripts of a hearing. (G) A release, newsletter, interpretive opinion, determination, or specific ruling. (H) Correspondence between a party and the commissioner directly relating to any document listed in subparagraphs (A) to (G), inclusive. (2) “Electronic signature” means an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record. (c) The Legislature finds and declares that the Department of Financial Protection and Innovation has continuously implemented methods to accept records filed electronically, including broker-dealer and investment adviser applications, and is encouraged to continue to expand its use of electronic filings to the extent feasible, as budget, resources, and equipment are made available to accomplish that goal. (Amended by Stats. 2022, Ch. 452, Sec. 84. (SB 1498) Effective January 1, 2023.)
  195. 25700.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 8. GENERAL PROVISIONS [25700 - 25707] ( Part 8 added by Stats. 1968, Ch. 88. )

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    Liability under this law does not apply to good-faith acts or omissions made in conformity with specified commissioner or Attorney General guidance, even if that guidance is later changed or invalidated.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 8. GENERAL PROVISIONS [25700 - 25707] ( Part 8 added by Stats. 1968, Ch. 88. ) ## 25700. No provision of this law imposing any liability applies to any act done or omitted in good faith in conformity with any rule, form, permit, order, or written interpretive opinion of the commissioner, or any such opinion of the Attorney General, notwithstanding that the rule, form, permit, order, or written interpretive opinion may later be amended or rescinded or be determined by judicial or other authority to be invalid for any reason. (Repealed and added by Stats. 1968, Ch. 88.)
  196. 25701.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 8. GENERAL PROVISIONS [25700 - 25707] ( Part 8 added by Stats. 1968, Ch. 88. )

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    A term that tries to make a security buyer waive compliance with this law or related rules/orders is void.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 8. GENERAL PROVISIONS [25700 - 25707] ( Part 8 added by Stats. 1968, Ch. 88. ) ## 25701. Any condition, stipulation or provision purporting to bind any person acquiring any security to waive compliance with any provision of this law or any rule or order hereunder is void. (Repealed and added by Stats. 1968, Ch. 88.)
  197. 25702.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 8. GENERAL PROVISIONS [25700 - 25707] ( Part 8 added by Stats. 1968, Ch. 88. )

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    A person entitled to a hearing may agree, together with the commissioner, to use an independent hearing officer instead of a formal Department hearing.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 8. GENERAL PROVISIONS [25700 - 25707] ( Part 8 added by Stats. 1968, Ch. 88. ) ## 25702. Whenever a person is entitled under this law to a hearing in accordance with the provisions of the Administrative Procedure Act, Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, a formal hearing before the Department of Financial Protection and Innovation may be substituted with the consent of such person and of the commissioner for such hearing before an independent hearing officer; and in that case after such hearing before the Department of Financial Protection and Innovation such person shall not be entitled to any further administrative remedy. (Amended by Stats. 2022, Ch. 452, Sec. 85. (SB 1498) Effective January 1, 2023.)
  198. 25703.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 8. GENERAL PROVISIONS [25700 - 25707] ( Part 8 added by Stats. 1968, Ch. 88. )

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    If part of this law is held invalid, the rest still applies if it can work without the invalid part.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 8. GENERAL PROVISIONS [25700 - 25707] ( Part 8 added by Stats. 1968, Ch. 88. ) ## 25703. If any provision of this law or the application thereof to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications of this law which can be given effect without the invalid provision or application, and to this end the provisions of this law are declared to be severable. (Repealed and added by Stats. 1968, Ch. 88.)
  199. 25704.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 8. GENERAL PROVISIONS [25700 - 25707] ( Part 8 added by Stats. 1968, Ch. 88. )

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    This section sets transition rules for older matters, permits, registrations, and reviews after the law’s effective date.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 8. GENERAL PROVISIONS [25700 - 25707] ( Part 8 added by Stats. 1968, Ch. 88. ) ## 25704. (a) Except as expressly provided in this section, prior law exclusively governs all suits, actions, prosecutions or proceedings which are pending or may be initiated on the basis of facts or circumstances occurring before the effective date of this law. (b) No civil suit or action may be maintained to enforce any liability or to establish that any securities are void under prior law unless brought within any period of limitation which applied when the cause of action accrued and, in any event, within three years after the effective date of this law. (c) All effective permits, certificates, orders, consents, and registrations under prior law, all administrative orders relating to the same and all conditions imposed upon the same remain in effect so long as they would have remained in effect if this law had not been enacted. They are considered to have been filed, entered, or imposed under this law, but are governed by prior law. Certificates dated as of January 1, 1969, may be issued by the commissioner after the effective date of this law pursuant to applications filed prior thereto and shall be considered to have been issued under the prior law. Applications for permits filed prior to January 1, 1969, may subsequently be processed without amendment if they comply with prior law, but thereafter shall be otherwise governed by this law. (d) Judicial review of all administrative orders as to which review proceedings have not been instituted by the effective date of this law are governed by Section 25609, except that no review proceeding may be instituted unless the petition is filed within any period of limitation which applied to a review proceeding when the order was entered. (Repealed and added by Stats. 1968, Ch. 88.)
  200. 25705.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 8. GENERAL PROVISIONS [25700 - 25707] ( Part 8 added by Stats. 1968, Ch. 88. )

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    References to “the Corporate Securities Law” in California codes or statutes must be read as references to the Corporate Securities Law of 1968.

    ## Corporations Code - CORP ## TITLE 4. SECURITIES [25000 - 31528] ( Title 4 added by Stats. 1949, Ch. 384. ) ## DIVISION 1. CORPORATE SECURITIES LAW OF 1968 [25000 - 25707] ( Division 1 repealed and added by Stats. 1968, Ch. 88. ) ## PART 8. GENERAL PROVISIONS [25700 - 25707] ( Part 8 added by Stats. 1968, Ch. 88. ) ## 25705. All references to “the Corporate Securities Law” in any code or statute of the State of California shall hereafter be deemed to be references to the Corporate Securities Law of 1968. (Repealed and added by Stats. 1968, Ch. 88.)

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