California 2015-2016 Regular Session Status: In Committee

AB 722 — Securities transactions: qualifications by permit: liability.

Last action — From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.

  1. ✓
    Introduced
  2. 2
    In Committee
  3. 3
    Passed Assembly
  4. 4
    Passed Senate
  5. 5
    To Executive
  6. 6
    Enacted

This bill died with 2015-2016 Regular Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.

This bill is no longer active — its legislative session has ended, so there is no live prognosis. It would have to be reintroduced in the current session to move again.

Summary

Existing law, the Corporate Securities Law of 1968, requires securities offered or sold in this state in an issuer or nonissuer transaction to be qualified through an application filed with the Commissioner of Business Oversight, unless exempt from the qualification requirements. That law makes it unlawful, for a person in connection with the offer, sale, or purchase of a security, to engage in fraudulent or misleading acts or omissions. This bill would authorize an applicant to file an application for qualification of the offer or sale of a security by crowdfunding permit if certain conditions are met, including that the total offering of securities by the applicant to be sold in a 12-month period, within or outside this state, is limited to $1,000,000, less a specified amount; the aggregate amount of securities sold to any investor, including any amount sold during the 12-month period preceding the date of the transaction, does not exceed the lesser of $5,000 or 10% of the net worth of that natural person; and the issuer will not, directly or indirectly, conduct any unsolicited telephone solicitation of the securities offered. This bill would impose a filing fee of $200 plus 15 of 2% of the aggregate value of the securities sought to be sold in this state. Existing law provides that any person who violates a condition of qualification of the offer or sale of a security is liable to any person acquiring the security sold in violation, who may sue to recover the consideration paid for such security with interest thereon at the legal rate or for damages, as specified. This bill would extend that provision to a violation of a condition of qualification by permit authorized by this bill. This bill would also require a court to award reasonable attorney's fees and costs, and authorize the award of treble and punitive damages, to a prevailing purchaser in an action brought against any person who violates those conditions of qualification by permit authorized by this bill. Existing law imposes liability on any person who engages in specified unlawful activity to the person who purchases a security from him or sells a security to him, and authorizes the purchaser or seller to sue either for rescission or for damages. This bill would provide that the plaintiff is not required to plead or prove that the defendant acted with scienter.

Bill Text

Action History

  1. From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.

  2. Died pursuant to Article IV, Sec. 10(c) of the Constitution.

  3. In committee: Held under submission.

  4. In committee: Set, second hearing. Referred to APPR. suspense file.

  5. In committee: Set, first hearing. Hearing canceled at the request of author.

  6. Re-referred to Com. on APPR.

  7. Read second time and amended.

  8. From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 10. Noes 0.) (April 28).

  9. Re-referred to Com. on JUD.

  10. Read second time and amended.

  11. From committee: Amend, and do pass as amended and re-refer to Com. on JUD. (Ayes 9. Noes 2.) (April 20).

  12. Referred to Coms. on B. & F. and JUD.

  13. From printer. May be heard in committee March 28.

  14. Read first time. To print.

Sponsors

  • Perea · Primary

Sponsorship breakdown

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1 sponsors · 0 co-sponsors · 121 not signed on · 2 voted No

Sponsors (1)

  • Perea

Co-sponsors (0)

None.

Not signed on (121)

121 members have not signed on to this bill.

Show all 121 →

"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

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Votes

Subjects

finance
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Frequently asked questions

What does AB 722 do?
Existing law, the Corporate Securities Law of 1968, requires securities offered or sold in this state in an issuer or nonissuer transaction to be qualified through an application filed with the Commissioner of Business Oversight, unless exempt from the qualification requirements. That law makes it unlawful, for a person in connection with the offer, sale, or purchase of a security, to engage in fraudulent or misleading acts or omissions. This bill would authorize an applicant to file an application for qualification of the offer or sale of a security by crowdfunding permit if certain conditions are met, including that the total offering of securities by the applicant to be sold in a 12-month period, within or outside this state, is limited to $1,000,000, less a specified amount; the aggregate amount of securities sold to any investor, including any amount sold during the 12-month period preceding the date of the transaction, does not exceed the lesser of $5,000 or 10% of the net worth of that natural person; and the issuer will not, directly or indirectly, conduct any unsolicited telephone solicitation of the securities offered. This bill would impose a filing fee of $200 plus 15 of 2% of the aggregate value of the securities sought to be sold in this state. Existing law provides that any person who violates a condition of qualification of the offer or sale of a security is liable to any person acquiring the security sold in violation, who may sue to recover the consideration paid for such security with interest thereon at the legal rate or for damages, as specified. This bill would extend that provision to a violation of a condition of qualification by permit authorized by this bill. This bill would also require a court to award reasonable attorney's fees and costs, and authorize the award of treble and punitive damages, to a prevailing purchaser in an action brought against any person who violates those conditions of qualification by permit authorized by this bill. Existing law imposes liability on any person who engages in specified unlawful activity to the person who purchases a security from him or sells a security to him, and authorizes the purchaser or seller to sue either for rescission or for damages. This bill would provide that the plaintiff is not required to plead or prove that the defendant acted with scienter.
Who sponsors AB 722?
AB 722 is sponsored by Perea.
What is the current status of AB 722?
This bill died with 2015-2016 Regular Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.
Where can I track AB 722?
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