Yesterday's post noted that Section 25400(d) was modeled on Section 9(a)(4) of the Securities Exchange Act of 1934.  Federal courts have stated that Section 9(a)(4) is violated when there is a:

1. misstatement or omission;

2. of material fact;

3. made with scienter;

4. for the purpose of inducing a sale or purchase of a security;

5. on which the plaintiff relied; and

6. that affected plaintiff's purchase or selling price.

Salvani v. InvestorsHub.com, Inc., 628 Fed. Appx. 784, 786 (2015) (quoting Chemetron Corp. v. Bus. Funds, Inc., 682 F.2d 1149, 1161-62 (5th Cir. 1982) (footnotes omitted), vacated on other grounds, 460 U.S. 1007, 103 S. Ct. 1245, 75 L. Ed. 2d 476 (1983)).

Thus, it is surprising that the California Supreme Court has noted the absence of reliance requirement in Section 25400(d).  Mirkin v. Wasserman, 5 Cal. 4th 1082, 1102 (1993).  The Supreme Court's decision cites the Court of Appeal's decision in Bowden v. Robinson, 67 Cal. App. 3d 705, 714 (1977) which in turn quotes a law review article, Olson, The California Corporate Securities Law of 1968, 9 Santa Clara Law. 75. 

All of these statements may properly be regarded as dicta.  In Mirkin, the question before the court was whether the plaintiffs could plead a cause of action for deceit under Civil Code sections 1709 and 1710 without alleging that they actually relied on the misrepresentations.  The Supreme Court said "no".  In Bowden, the plaintiffs' did not plead a cause of action based on Section 25400.  The author of the Santa Clara Lawyer article does not provide any support for the claim that reliance is not required under the statute.