Bill Text: CA SB726 | 2015-2016 | Regular Session | Amended

California Senate Bill 726 (Prior Session Legislation)

Bill Title: Corporate securities: unlawful conduct: regulations.

Sponsorship: Partisan Bill (Democrat 3)

Status: (Failed) 2016-11-30 - From Assembly without further action. [SB726 Detail]

Download: California-2015-SB726-Amended.html

BILL NUMBER: SB 726	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 30, 2016
	AMENDED IN ASSEMBLY  JUNE 8, 2016
	AMENDED IN ASSEMBLY  MARCH 31, 2016
	AMENDED IN ASSEMBLY  SEPTEMBER 3, 2015

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

                        FEBRUARY 27, 2015

   An act to add Section  25401.2   25401.1
 to the Corporations Code, relating to corporate securities.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 726, as amended, Hueso. Corporate securities: unlawful 
conduct.   conduct: regulations.  
   (1) The 
    The  Corporate Securities Law of 1968 generally
regulates the offer and sale of corporate securities within the
state, and specifically makes specified conduct with regard to the
offer and sale of corporate securities unlawful. That law requires
the Commissioner of Business Oversight to perform specific oversight
duties regarding the offer and sale of securities and provides that
any willful violation of that law is a crime. 
   This bill would make it unlawful for any person, directly or
indirectly, in this state to knowingly or recklessly make 
    Existing law prohibits any person from selling a security in
this state by means of a communication that includes  an untrue
statement of material fact or  omit to state  
that omits  a material fact necessary in order to make the
statements made, in light of the circumstances under which the
statements are made, not  misleading, to any California state
government official with the intention of inducing an investigation
of a publicly traded company for the purpose of manipulating the
value of a security of that publicly traded company for financial
gain. The bill would prohibit these provisions from being deemed to
require the commissioner to affirmatively track or investigate
anonymous complaints he or she receives, or to publicly disclose the
substance of a confidential investigation, relating to this unlawful
practice.   misleading.  
   This bill would require the commissioner to adopt regulations to
prohibit fraudulent and manipulative practices by persons undertaking
short sales in the securities market. 
   By expanding the scope of a crime, this bill would impose a
state-mandated local program.
   (2) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
   
  SECTION 1.    Section 25401.1 is added to the Corporations
Code, to read:
   25401.1.  The commissioner shall adopt regulations to prohibit
fraudulent and manipulative practices by persons undertaking short
sales in the securities market.  
  SECTION 1.    Section 25401.2 is added to the
Corporations Code, to read:
   25401.2.  (a) It is unlawful for any person, directly or
indirectly, in this state to knowingly or recklessly make an untrue
statement of material fact or omit to state a material fact necessary
in order to make the statements made, in light of the circumstances
under which the statements are made, not misleading, to any
California state government official with the intention of inducing
an investigation of a publicly traded company for the purpose of
manipulating the value of a security of that publicly traded company
for financial gain.
   (b) This section shall not be deemed to require the commissioner
to affirmatively track or investigate anonymous complaints he or she
receives, or to publicly disclose the substance of a confidential
investigation, relating to a violation of this section. 
  SEC. 2.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.