June 29, 2022

Volume XII, Number 180

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A Truly Piscatory Exemption

California's blue sky law, the Corporate Securities Law of 1968, generally requires that offers and sales of securities be qualified unless the security or transaction is exempt or not subject to qualification.  Most exemptions are conveniently located in the CSL or the rules of the Commissioner of Financial Protection & Innovation.  Occasionally, however, I run across exemptions in other laws.  

One such exemption can be found in California's Fish Marketing Act.  The California legislature enacted this act in 1957 to "promote, foster, and encourage the intelligent and orderly marketing of fish and fishery products through cooperation; to eliminate speculation and waste; to make the distribution of fish and fishery products between producer and consumer as direct as can be efficiently done; and to stabilize the marketing of fish and fishery products".   Cal. Corp. Code § 13201.  The law provides for the organization of corporations, which it refers to as "associations".  Cal. Corp. Code § 13202(c).  

The Fish Marketing Act gives these associations a complete pass when it comes to compliance with the CSL.  Corporations Code Section 13205 provides:

No association is subject in any manner to the terms of the Corporate Securities Law and all associations may issue their membership certificates or stock or other securities as provided in this division without the necessity of any permit from the Commissioner of Business Oversight.

The breadth of this exemption is breathtaking, for it relieves fish marketing associations not only from the CSL's qualification requirements but also from its antifraud provisions.  

© 2010-2022 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume XII, Number 173
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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
Partner

Keith Bishop works with privately held and publicly traded companies on federal and state corporate and securities transactions, compliance, and governance matters. He is highly-regarded for his in-depth knowledge of the distinctive corporate and regulatory requirements faced by corporations in the state of California.

While many law firms have a great deal of expertise in federal or Delaware corporate law, Keith’s specific focus on California corporate and securities law is uncommon. A former California state regulator of securities and financial institutions, Keith has decades of...

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