state and canadian liaison roster and reports · 2001 park pl n, ste 700 birmingham, al 35203-2744...

Committee on State Regulation of Securities Page 1 Subcommittee on Liaisons to the States and Provinces

ABA Business Law Section Committee on State Regulation of Securities

Subcommittee of Liaisons to the States

State and Canadian Liaison Roster and Reports Covering the following jurisdictions: AL, AK, AZ, CA, CO, CT, FL, HI, IA, IL, IN, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NH, NJ, NM, NY, NC, OK, OR, PA, RI, SC, SD, TX, VT, WA, WV, WI, WY, DC, and CANADA

No reports for: AR, DE, GA, ID, NV, ND, OH, TN, UT, VA, PR, VI

Updated through July 31, 2009 Co-Chair: Mr. Donald A. Rett Law Office of Donald Rett 1660 Metropolitan Circle Tallahassee, Florida 32308 E-Mail [email protected] (850) 298-4454 (Work)

Co-Chair: Mr. Shane B. Hansen Warner Norcross & Judd LLP 111 Lyon Street, N.W., # 900 Grand Rapids, Michigan 49503 E-mail [email protected] (616) 752-2145 (Work)

Report Report LIAISONS Page LIAISONS Page AL Ms. Carolyn L. Duncan 8 Cabaniss Johnston, et al. 2001 Park Pl N, Ste 700 Birmingham, AL 35203-2744 E-Mail [email protected] (205) 716-5255 (Work) (205) 716-5389 (Fax) AK Mr. Julius J. Brecht 13 Wohlforth, Johnson, Brecht, Cartledge & Brooking 900 West 5th Avenue Suite 600 Anchorage, AK 99501-2044 E-Mail [email protected] (907) 276-6401 (Work) (907) 276-5093 (Fax)

AZ Mr. Dee Riddell Harris 19 Arizona Angels Venture Group, Inc. ASU SkySong 1475 North Scottsdale Road, Suite 200 Scottsdale, AZ 85257-3538 E-Mail [email protected] (602) 617-7833 (Cell) (602) 840-4078 (Home) (602) 840-6824 (Home Fax) AR Mr. C. Douglas Buford Jr. N/R Mitchell Williams Law-Little Rock Office 425 West Capitol Avenue, Suite 1800 Little Rock, AR 72201-3525 E-Mail [email protected] (501) 688-8866 (Work)

mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]

Report Report LIAISONS Page LIAISONS Page


CA Mr. Keith Paul Bishop 24 Allen Matkins Leck Gamble Mallory & Natsis LLP 1900 Main Street, 5th Floor Irvine, CA 92614-7321 E-Mail [email protected] (949) 851-5428 (Work) (949) 553-8354 (Fax) CO/MT/WY Mr. Robert J. Ahrenholz 31 Kutak Rock LLP 1801 California Street, Suite 3100 Denver, CO 80202 E-Mail [email protected] (303) 297-2400 (Work) (303) 292-7799 (Fax) CT Mr. Richard Slavin 37 Cohen and Wolf, P.C. 320 Post Road West Westport, CT 06880 E-Mail [email protected] (203) 341-5310 (Work) (203) 341-5311 (Fax) (203) 556-8959 (Cell) DE Mr. Andrew M. Johnston N/R Morris Nichols, et al. Wilmington, DE 19899-1347 E-Mail [email protected] (302) 351-9202 (Work) (302) 658-3989 (Fax) FL Mr. Donald A. Rett 45 Law Office of Donald Rett 1660 Metropolitan Circle Tallahassee, FL 32308 E-Mail [email protected] (850) 298-4454 (Work) (904) 894-0700 (Home) (850) 298-4494 (Fax)

GA J. Steven Parker 49 Page Perry, LLC 1040 Crown Pointe Parkway, Suite 1050 Atlanta, GA 30338 E-Mail [email protected] (770) 673-0047 (Work) (770) 673-0120 (Fax) HI Mr. David J. Reber 50 Goodsill Anderson Quinn & Stifel 1099 Alakea Street, Suite 1800 Honolulu, HI 96813 E-Mail [email protected] (808) 547-5611 (Work) (808) 395-7994 (Home) (808) 441-1225 (Fax) ID Mr. Jeffrey W. Pusch N/R Fisher Pusch & Alderman, LLP U.S. Bank Building 101 South Capitol Boulevard, Suite 500 Boise, ID 83702 E-Mail [email protected] (208) 331-1000 (Work) (208) 331-2400 (Fax) IL John S. Monical 57 Lawrence, Kamin, Saunders & Uhlenhop, LLC 300 South Wacker Drive, Suite 500 Chicago, IL 60606 E-mail [email protected] (312) 372-1947 (Work) (312) 372-2389 (Fax) (312) 371-5579 (Cell)

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IN Mr. Stephen W. Sutherlin 63 Stewart & Irwin 251 East Ohio Street, Suite 1100 Indianapolis, IN 46204 E-Mail [email protected] (317) 639-5454 (Work) (317) 396-9541 (Direct Dial) (317) 733-8084 (Home) (317) 632-1319 (Fax) (317) 696-2254 (Cell) IA Ms. Katherine G. Manghillis 68 Schottenstein Zox & Dunn 250 West Street Columbus, Ohio 43215 E-Mail [email protected] (614) 462-1087 (Work) (614) 228-4846 (Fax) KS/MO Mr. William M. Schutte 74 Polsinelli Shugart PC 700 W. 47th Street, Suite 1000 Kansas City, MO 64112 E-Mail [email protected] (816) 753-1000 (Work) (816) 753-1536 (Fax) (816) 914-3704 (Cell) KY Mr. Manning G. Warren III 79 University of Louisville Louis D. Brandeis School of Law 2301 South Third Street Louisville, KY 40292 E-Mail [email protected] (502) 852-7265 (Work) (502) 852-0862 (Fax)

LA Mr. Carl C. Hanemann 83 Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P. Place St. Charles 201 St. Charles Avenue, 51st Floor New Orleans, LA 70170-5100 E-Mail [email protected] (504) 582-8156 (Work) (504) 861-3992 (Home) (504) 582-8012 (Fax) ME Christine A. Bruenn 88 Bingham McCutchen LLP 85 Exchange Street, 3rd Floor Portland, Maine 04101-5045 E-Mail [email protected] (207) 780-8288 (Work) (207) 780-8298 (Fax) MD Mr. Wm. David Chalk 97 DLA Piper LLP (US) 6225 Smith Avenue Baltimore, MD 21209-3600 E-Mail [email protected] (410) 580-4120 (Work) (410) 580-3120 (Fax) (410) 499-9555 (Cell) MA Mr. Michael M. Jurasic 102 Ropes & Gray One International Place Boston, MA 02110-2624 E-mail [email protected] (617) 951-7754 (Work) (617) 235-0698 (Fax) (617) 710-0619 (Cell) MI Mr. Shane B. Hansen 106 Warner Norcross & Judd LLP 111 Lyon Street, N.W., Suite 900 Grand Rapids, MI 49503-2487 E-mail [email protected] (616) 752-2145 (Work) (616) 942-7063 (Home) (616) 752-2500 (Fax)

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MN [Successor Pending] 122 MS Mr. Daniel G. Hise 128 Butler, Snow, OMara, Stevens & Cannada, PLLC Post Office Box 22567 Jackson, MS 39225-2567 E-Mail [email protected] (601) 985-5711 (Work) (601) 355-1742 (Home) (601) 985-4500 (Fax) MO (SEE KANSAS) 130 MT (SEE COLORADO) 134 NE Mr. Steven P. Amen 138 Kutak Rock LLP The Omaha Building 1650 Farnam Street Omaha, Nebraska 68102-2186 E-Mail [email protected] (402) 346-6000 (Work) (402) 346-1148 (Fax) NV Mr. Ken Creighton N/R 9295 Prototype Drive Reno, NV 89511 E-Mail [email protected] (775) 448-0119 (Work) (775) 825-1844 (Home) (775) 448-0120 (Fax)

NH Mr. Richard A. Samuels 145 McLane, Graf, Raulerson & Middleton P.A. 900 Elm Street Post Office Box 326 Manchester, NH 03105-0326 E-Mail [email protected] (603) 628-1470 (Work) (603) 228-8636 (Home) (603) 625-5650 (Fax) (603) 496-7610 (Cell) NJ Mr. Peter D. Hutcheon 149 Norris, McLaughlin & Marcus, P.A. 721 Route 202-206 Post Office Box 5933 Somerville, NJ 08876-5933 E-Mail [email protected] (908) 252-4216 (Work) (908) 356-4766 (Home) (908) 722-0755 (Fax) NM Ms. Jean C. Moore 156 Sutin Thayer & Browne Two Park Square, Suite 1000 Albuquerque, NM 87110 Mailing Address: P.O. Box 1945 Albuquerque, NM 87103 E-Mail [email protected] (505) 883-3447 (Work) (505) 855-9576 (Fax) NY Mr. F. Lee Liebolt, Jr. 163 420 Lexington Avenue, Suite 2620 New York, NY 10170 E-Mail [email protected] (212) 286-1384 (Work) (212) 369-8067 (Home) (212) 286-1389 (Fax)

mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]



NC Mr. David N. Jonson 167 K&L Gates LLP 3450 Lassiter at North Hills Avenue Suite 300 (27609) Post Office Box 17047 Raleigh, NC 27619-7047 E-Mail [email protected] (919) 743-7308 (Work) (919) 639-0598 (Home) (919) 516-2008 (Fax) (919) 749-2762 (Cell) ND Mr. Craig A. Boeckel N/R Pagel Weikum Law Firm 1715 Burnt Boat Drive, Madison Suite Bismarck, ND 58503 E-Mail [email protected] (701) 250-1369 (Work) (701) 250-1368 (Fax) OH Ms. Katherine G. Manghillis 173 Schottenstein Zox & Dunn 250 West Street Columbus, Ohio 43215 E-Mail [email protected] (614) 462-1087 (Work) (614) 228-4846 (Fax) OK Mr. C. Raymond Patton, Jr. 174 Conner & Winters A Professional Corporation 4000 One Williams Center Tulsa, OK 74172-0148 E-Mail [email protected] (918) 586-8523 (Work) (918) 299-5838 (Home) (918) 586-8623 (Fax) (918) 629-2436 (Cell)

OR Mr. Jacob (Jake) Heth 178 Davis Wright Tremaine LLP 1300 SW Fifth Avenue Suite 2300 Portland, OR 97201 E-Mail [email protected] (503) 778-5396 (Work) (503) 778-5299 (Fax) PA G. Philip Rutledge 183 Bybel Rutledge LLP 1017 Mumma Road, Suite 302 Lemoyne, Pennsylvania 17043 E-Mail [email protected] (717) 731-1700 (Work) (717) 731-8205 (Fax) (717) 503-1928 (Cell) RI Mr. John F. Corrigan 188 John F. Corrigan PC 90 Elm Street, Suite 2000 Providence, RI 02903-4647 E-Mail [email protected] (401) 276-8350 (Work) (401) 885-1025 (Home) (401) 633-6145 (Fax) (401) 219-1400 (Cell) SC Mr. F. Daniel Bell III 192 K&L Gates LLP 4350 Lassiter at North Hills Ave., Ste 300 Raleigh, NC 27609 E-Mail [email protected] (919) 743-7335 (Work) (919) 872-7886 (Home) (919) 516-2035 (Fax)

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SD Mr. Charles D. Gullickson 196 Davenport, Evans, Hurwitz & Smith, L.L.P. 206 West 14th Street Post Office Box 1030 Sioux Falls, SD 57101-1030 E-Mail [email protected] (605) 357-1270 (Work) (605) 331-3880 (Home) (605) 335-3639 (Fax) TN Ms. E. Marlee Mitchell N/R Waller Lansden Dortch & Davis, PLLC Nashville City Center Suite 2100, 511 Union Street Nashville, TN 37219-1760 E-Mail [email protected] (615) 244-6380 (Work) (615) 298-2514 (Home) (615) 244-6804 (Fax) TX Mr. Daniel R. Waller 202 Secore & Waller LLP 12221 Merit Drive, Suite 1100 Dallas, TX 75251-2227 E-Mail [email protected] (972) 776-0200 (Work) (972) 392-2452 (Home) (972) 776-0240 (Fax) UT Mr. Erik A. Christiansen N/R Parsons Behle & Latimer 201 South Main Street, Suite 1800 Salt Lake City, UT 84111 E-Mail [email protected] (800) 293-9669 (Toll Free) (801) 532-1234 (Work) (801) 536-6111 (Fax)

VT Mr. William (Chip) A. Mason 209 Gravel and Shea 76 St. Paul Street, 7th Floor Post Office Box 369 Burlington, VT 05402-0369 E-Mail [email protected] (802) 658-0220 (Work) (802) 658-1456 (Fax) VA Mr. Thomas G. Voekler 212 Hirschler Fleischer The Edgeworth Building 2100 East Cary Street Richmond, VA 23223-7078 Post Office Box 500 Richmond, VA 23218-0500 E-mail [email protected] (804) 771-9599 (Work) (804) 241-3529 (Cell) (804) 644-0957 (Fax) WA Mr. John L. Mericle 213 Harris, Mericle & Wakayama 999 Third Avenue, Suite 3210 Seattle, WA 98104 E-Mail [email protected] (425) 742-3985 (Work) (425) 724-4676 (Fax) (206) 601-9993 (Cell) WV Mr. Edward D. McDevitt 222 Bowles Rice McDavid Graff & Love, PLLC 600 Quarrier Street Charleston, WV 25314 E-Mail [email protected] (304) 347-1711 (Work) (304) 345-4188 (Home) (304) 343-3058 (Fax)

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WI Mr. Terry Nelson 227 Foley & Lardner 150 East Gilman Post Office Box 1497 Madison, WI 53701 E-Mail [email protected] (608) 258-4232 (Work) (608) 836-8855 (Home) (608) 258-4258 (Fax) WY SEE COLORADO 230 DC Ms. Michele A. Kulerman 234 Hogan & Hartson L.L.P. Columbia Square 555 Thirteenth Street, N.W. Washington, DC 20004-1109 E-Mail [email protected] (202) 637-5743 (Work) (301) 279-6772 (Home) (202) 637-5910 (Fax)

PR [Vacant] N/R USVI Mr. Tom Bolt N/R Tom Bolt & Associates PC Corporate Place 5600 Royal Dane Mall St. Thomas, VI 00802-6410 E-Mail [email protected] (340) 774-2944 (Work) (340) 776-1639 (Fax) CAN Mr. Paul G. Findlay 241 Borden Ladner Gervais LLP Scotia Plaza, Suite 4400 40 King Street West Toronto, Ontario M5H 3Y4 Canada E-Mail [email protected] (416) 367-6191 (Work) (416) 484-9862 (Home) (416) 361-7083 (Fax)

mailto:[email protected]:[email protected]:[email protected]:[email protected]

ALABAMA


ALABAMA STATE LIAISON REPORT

(As of March 16, 2009) This report summarizes material developments affecting blue sky practitioners in this jurisdiction as of the date indicated above. Liaison: Carolyn L. Duncan

Cabaniss, Johnston, Gardner, Dumas & ONeal LLP 2001 Park Place North, Suite 700 Birmingham, Alabama 35203

Email: Telephone:

Fax: Website:

[email protected] (205) 716-5255 (direct) (205) 716-5389 www.cabaniss.com

Securities Administrator: Hon. Joseph P. Borg, Director

Alabama Securities Commission 770 Washington Ave, Suite 570 Montgomery, AL 36130-4700

Main Telephone: Main Fax:

Website:

(800) 222-1253 or (334) 242-2984 (334) 242-0240 or (334) 353-4690 www.asc.state.al.us

Statute Title/Citation: Alabama Securities Act

Full cite: Code of Alabama (1975) 8-6-1, et seq. Short cite: Ala. Code

Internet Access: http://www.asc.state.al.us/statutes.htm and http://www.legislature.state.al.us/CodeofAlabama/1975/coatoc.htm

Rules Name/Citation: Rules of the Alabama Securities Commission, Alabama Administrative Code, Chapter 830 (Rules 830-X-1 et seq.)

Internet Access: http://www.alabamaadministrativecode.state.al.us/docs/sec/index.html and http://www.asc.state.al.us/statutes.htm (see, however, cautionary note below)

mailto:[email protected]://www.cabaniss.comhttp://www.asc.state.al.ushttp://www.asc.state.al.us/statutes.htmhttp://www.legislature.state.al.us/CodeofAlabama/1975/coatoc.htmhttp://www.alabamaadministrativecode.state.al.us/docs/sec/index.htmlhttp://www.asc.state.al.us/statutes.htm

ALABAMA


Highlights of Material Developments None to report. Securities Statutory Developments

The Alabama Securities Commission again this year is seeking piecemeal legislation to increase filing fees, criminal penalties and civil fines, plus a few technical changes intended to conform the Alabama statutes to NSMIA. Identical bills have been reported out of committee in both legislative chambers. If adopted, the bills would increase all filing fees by ten to twenty percent (Rule 506 filings would increase from $250 to $300). Criminal penalties would be increased from Class C felonies to Class B felonies (two to twenty year prison terms and fines up to $10,000 plus twice the amount of any criminal gain) for:

Willful violations of the strict liability provisions (registration requirements for broker-dealers, agents, investment advisers and investment adviser representatives, and securities registration requirements); and

Violations of the anti-fraud provisions.

Applicable State Statute of Limitations Periods Criminal Enforcement Proceedings: Five years after the alleged violation. Ala. Code 8-6-18(a). Civil Actions: For registration violations, two years from the date of sale. For all other actions for relief, the earlier of two years from discovery of the violation or when discovery should have been made in the exercise of reasonable care. Ala. Code 8-6-19(f). Applicable State Statutory Interest Rate

Six percent from the date of payment, Ala. Code 8-6-19(b)(1) and (2) for investment adviser registration violations or investment adviser fraud, respectively, and 8-6-19(a) for all other acts in violation of the Act. Securities Rules Developments Use of Senior-Specific Certifications and Professional Designations. New Rule 830-X-3-.28 was adopted effective November 4, 2008. The use of any senior-specific certification or professional designations by any person in connection with the offer, purchase or sale of securities or the provision of advice relating to securities is prohibited, unless the professional designation or certification is actually earned and awarded according to accepted educational and training criteria. There is a rebuttable presumption that a designating or certifying organization is qualified for purposes of the rule if the organization has been accredited by any of several listed accrediting organizations or others later designated as such by the Director. The burden of

ALABAMA


proof in any proceeding under the rule is upon the person claiming any such certification or designation. Caution: At the date of this report, the Commissions website still indicated that this rule and two others long since adopted are proposed for adoption, and they are not yet included in the body of the Rules on the Commissions website. The rules were adopted as proposed, so the text shown in the proposals is accurate. We have brought this to the staffs attention, and expect it will be corrected shortly. In the meantime, we advise checking all Rules on the States primary website for the Administrative Code: http://www.alabamaadministrativecode.state.al.us/docs/sec/index.html Administrators Staffing Changes Edwin Reed has assumed the position and responsibilities of General Counsel effective January 1, 2009. Ed has served with the Commission in several capacities since 1993 and assumes his new role from J. Randall McNeill who is maintaining the position of Deputy Director Ed began his tenure with the Commission as a securities analyst and was appointed securities registration manager in 1997, serving in that capacity until he was appointed associate counsel in 2002. He handled legal issues associated with the registration/exemption of securities, brokers, agents, investment advisers, investment adviser representatives and was also responsible for the overall management of the Commissions registration division. He has served on several NASAA committees and assisted with the development of uniform state rules, testing for regulating investment advisers and assisted with the development of comprehensive training program for the examination and auditing of investment advisers nationwide. Randy McNeill continues as Deputy Director and chief prosecutor. He will also assist Director Joe Borg with additional administrative responsibilities in the overall operation of the Commission, in addition to managing an ever increasing enforcement work load. Administrative Orders and Announcements Nothing to report.

http://www.alabamaadministrativecode.state.al.us/docs/sec/index.html

ALABAMA


FORM D FILING PRACTICES SUPPLEMENT Form D Filings and Related Issues Liaison note: Except as otherwise indicated, the responses below were provided by the Alabama Securities Commission staff. The Commission has not to date published a statement or guidelines on the new Form D filings, and the staff was pleased for this opportunity to advise the practicing bar of its current practice. The staff advises that it is supportive of the NASAA initiative to develop a uniform and/or one-stop state filing procedure, and expects to actively participate in the project. Commission staff is glad to respond to questions or requests for assistance. Does your administrator accept the new Form D? Is it optional or mandatory, until when? Effective March 16, 2009, new Form D is mandatory. Until what date will your administrator accept the Temporary Form D or old Form D? Effective March 16, 2009, Temporary Form D and old Form D are no longer being

accepted. Will your administrator accept copies of an as-filed new Form D with the SEC or is a

separate, manually signed copy required? Separate, manually signed copy is required.

Liaison note: upon being informed that there are still numerous technical glitches and difficulties in the SEC filing process, Commission staff indicated they are willing to work with issuers counsel in such situations.

As applicable, may an issuer simultaneously check claims of exemption under Rules 504,

505 and 506 under Regulation D? Yes Must issuers still file a copy of the state Appendix from the old Form D? No If no Appendix is required, must the filing letter give the amount sold in the state? No Must the filing letter give the date of first sale in the state?

No

ALABAMA


Must issuers file a separate Form U-2? No Can one Form D filing be used for multiple securities issued by different issuers in the

same offering (e.g., debt of a parent company with guarantees by multiple subsidiaries)? Yes What events trigger the filing clock (e.g., receipt of signed subscription or cash, etc)? Signed subscription (agreement to purchase). What is the states enforcement position on failure to file or late filings? This is evolving with time. We typically issue a C&D, with follow up on anti-fraud issues. We have found that 506 is being used, on an ever increasing basis, for fraudulent purposes. In such cases, we exercise whatever enforcement powers are deemed appropriate in light of the circumstances. Are annual renewal filings required and, if so, what is required (new fee, new U-2?)? If

not, must a copy of the electronic Form D be filed when it is renewed with the SEC? Must amendments also be filed?

No Are there any unusual policies or procedures followed by the administrators staff? No

ALASKA


ALASKA STATE LIAISON REPORT

(As of 2/26/09) This report summarizes material developments affecting blue sky practitioners in this jurisdiction as of the date indicated above. Liaison: Julius J. Brecht

Wohlforth Johnson Brecht Cartledge & Brooking 900 West 5th Avenue, Suite 600 Anchorage, AK 99501

Email: Telephone: Cell phone:

Fax: Website:

[email protected] 907.276.6401 907.276.9053 www.akatty.com

Securities Administrator: Lorie Hovanec

Alaska Division of Banking and Securities 150 3rd Street, Suite 217, Juneau, AK 99801 PO Box 110807, Juneau, AK 99811-0807


Website:

(907) 465.2521 (907) 465.1230 http://www.dced.state.ak.us/bsc/

Statutes Title/Citation: Alaska Securities Act-- AS 45.55

Internet Access: http://www.legis.state.ak.us/cgi-bin/folioisa.dll/stattx08/query=*/doc/{t20073}?

Rules Name/Citation: Alaska Securities Regulations-- 3AAC08.005-08.950 Internet Access: http://www.commerce.state.ak.us/bsc/regs.htm

Highlights of Material Developments The Division continues to consider USA 2002 and has various enforcement actions in progress.

mailto:[email protected]://www.akatty.comhttp://www.legis.state.ak.us/cgihttp://www.commerce.state.ak.us/bsc/regs.htm

ALASKA


Securities Statutory Developments The Division has continued interest in and is considering seeking repeal of ASA and replacement of it with USA 2002. The Division has contacted the Securities Law Section of the American Bar Association (Lynn Naefach and Philip Feigin, co-chairs) in this regard. Applicable State Statute of Limitations Periods The ASA statute of limitations period is three years after the sale or two years after the person bringing the action discovered or should have discovered the facts on which the action is based, whichever is later. AS 45.55.930(f). Applicable State Statutory Interest Rate The rate imposed in the context of rescission matters is 8% per year as specified at AS 45.55.930(a). Other Notable Statutory Developments None. Securities Rules Developments The Division is reviewing the 15-day notice requirement under Regulation D. Administrators Staffing Changes The Division recently gained two new examiners, bring the total complement to four securities examiners, three business regulation examiners and one investigator. Administrative Orders and Announcements None. Administrative Enforcement Proceedings (Note: enforcement matters are separately reported by the Subcommittee on Enforcement, contact Mike Underwood, Subcommittee Chair, at [email protected]; do not report these matters here.) Securities-related Case Law Developments An ANCSA proxy solicitation complaint is scheduled for argument in Superior Court shortly.

mailto:[email protected]

ALASKA


Other Noteworthy Practice Developments None.

FORM D FILING PRACTICES SUPPLEMENT Form D Filings and Related Issues Does your jurisdiction accept the new Form D? Is it optional or mandatory, until when? At present, Division will accept old or new form in paper format only, but it is in the process of establishing procedures for acceptance of the form electronically. The issue of continued acceptance of paper format will likely be addressed at that point. Until what date will your jurisdiction accept the Temporary Form D or old Form D? Until the Division adopts the above referenced procedures. As applicable, may an issuer simultaneously check claims of exemption under Rules 504,

505 and 506 under Regulation D? No. Must issuers still file a copy of the state Appendix from the old Form D? Yes, the Division still follows procedures requiring filing of the full "old" Form D. If no Appendix is required, must the filing letter give the amount sold in the state? N/A Must the filing letter give the date of first sale in the state? N/A Must issuers file a separate Form U-2? Under present Division procedures, yes. Can multiple offerings by the same issuer be covered in one Form D? No. Can one Form D filing be used for multiple affiliated issuers? This matter is considered on a case-by-case basis.

ALASKA


What events trigger the filing clock (e.g., receipt of signed subscription or cash, etc)? 15 days from confirmation of sale, e.g., acceptance of subscription. What is the states enforcement position on failure to file or late filings? The Division has this matter is under review. Are annual renewal filings required and, if so, what is required (new fee, new U-2?)? If

not, must a copy of the electronic Form D be filed when it is renewed with the SEC? Must amendments also be filed?

The Division's present procedures include a required filing fee of $600 for a notice filing lasting one year. At the end of that year, should the issuer wish to continue the offering in Alaska and under Regulation D, the issuer must file a new notice and pay a new filing fee of $600. In filing the initial notice, the issuer has the opportunity to pay $1,100 for a two year notice filing. A new Form U-2 is not required for the extension of the notice to the second year. At present, the ASA and Alaska Securities Regulations are silent as to whether an issuer is required to file an amendment to Form D with the Division. This matter is under review by the Division. Are there any unusual policies or procedures? N/A

ALASKA


UPDATE (As of 6/10/09)

Since the info was gathered for the response by the Alaska Division of Banking and Securities to the Form D Filing Practices Supplement as a part of the 2009 ABA State-Provincial Liaison Report, the situation has changed causing a need to revise portions of the response. The complete revised response (shown in Italic print) to certain of the questions as identified below is as follows, based upon my discussion with the staff of the Division earlier today: (1) Does your jurisdiction accept the new Form D? At present, the Division accepts, in paper format only, a copy of the executed new Form D as filed with the SEC. However, the Division intends to participate in the electronic platform being developed through NASAA allowing an issuer to file electronically that which previously was only filed in paper format. (2) Until what date will your jurisdiction accept the Temporary Form D or the old Form D? The Division accepted the Temporary Form D and the old Form D up to 3/15/09. From 3/16/09 and forward, only the new Form D is accepted by the Division. (3) Must issuers still file a copy of the state Appendix from the old Form D? No, in this context, the Division only requires the filing of a copy of the new Form D, which incorporates the essence of Form U-2. (4) If no Appendix is required, must the filing letter give the amount sold in the state? No. (5) Must the filing letter give the date of first sale in the state? Yes. (6) Must issuers file a separate Form U-2? If the filing is in conjunction with filing of a copy of the new Form D, no Form U-2 needs to be filed. Should the filing relate to the use of the old Form D, e.g., amending a Temporary Form D or an old Form D to include sales in Alaska, a Form U-2 is required if not previously filed with the Division. (7) Are annual renewal filings required and, if so, what is required (new fee, new U-2)? Under the Alaska Securities Act, offerings under Rules 504 and 505 must each be registered and the registration fee is good for one year after which and assuming the issuer wishes to continue the offering a renewal fee must be paid before continuing the offering. Under

ALASKA


ASA and in the context of a Rule 506 offering, the Division's present procedures include requiring a filing fee of $600 for a notice filing lasting one year. At the end of that year, should the issuer wish to continue the offering in Alaska and under Regulation D, Rule 506, the issuer must file a new notice and pay a new filing fee of $600. In filing the initial notice under Rule 506, the issuer has the opportunity to pay $1,100 for a two year notice filing. At present, the ASA and the Alaska Securities Regulations are silent as to whether an issuer is required to file an amendment to Form D with the Division. This matter is under review by the Division.

ARIZONA


ARIZONA STATE LIAISON REPORT

This report summarizes material developments affecting blue sky practitioners in this jurisdiction as of the date indicated above. Liaison: Mr. Dee Riddell Harris

Arizona Angels Venture Group, Inc. ASU SkySong 1475 North Scottsdale Road, Suite 200 Scottsdale, AZ 85257-3538


Fax: Website:

[email protected] (602) 840-4078 (602) 617-7833 (602) 840-6824

Securities Administrator: Matthew J. Neubert Director Securities Division, Arizona Corporations Commission 1300 W. Washington St. 3rd Floor Phoenix, AZ 85007


Website:

(602) 542-4242 or (866) 837-4399 (602) 594-7470 http://www.azcc.gov/divisions/securities/

Statutes Title/Citation: Securities Act of Arizona Investment Management Act of Arizona

Internet Access: http://www.azcc.gov/divisions/securities/statutes_and_rules.asp

Rules Name/Citation: Title 14. Public Service Corporations; Corporations and Associations; Securities Regulation Chapter 4. Corporation Commission, Securities Chapter 6. Corporation Commission, Investment Management

Internet Access: http://www.azsos.gov/public_services/Title_14/14-04.htm http://www.azsos.gov/public_services/Title_14/14-06.htm

The Arizona Corporation Commission had previously adopted the NASAA Guidelines as its rules in Rule R14-4-116. In Arizona it is not possible to incorporate future changes to rules by reference. Accordingly, many recent amendments to NASAA guidelines were not part of Arizonas Rules.

http://[email protected]://www.azcc.gov/divisions/securities/http://www.azcc.gov/divisions/securities/statutes_and_rules.asphttp://www.azsos.gov/public_services/Title_14/14-04.htmhttp://www.azsos.gov/public_services/Title_14/14-06.htm

ARIZONA


Effective October 21, 2008, Rule R14-4-116 was amended to incorporate various amendments to various Guidelines. Specifically incorporated were 2007 amendments to the following NASAA Guidelines: Asset-Backed Securities, Mortgage Program Guidelines, Commodity Pool Programs Guidelines, Equipment Program Guidelines, Oil and Gas Programs, the Statement of Policy Regarding Real Estate Investment Trusts, Real Estate Programs Guidelines, and the Omnibus Guidelines (to revise suitability standards to reflect inflation. On February 19, 2009, the Commission sanctioned multiple individuals and their affiliated companies whose securities defrauded over $7.89 million from investors, ordered that amount in restitutions, and ordered that a total of $485,000 of administrative penalties be paid. The cases involved selling away, misrepresentation, depositing investor funds in the account of a broker, manufacturing fictitious client account statements, sale of unregistered promissory notes, using brokers own post office boxes as addresses for customers, and sale of unregistered securities. An interesting case, and possibly one that suggests a novel, but unlikely way, to offer securities is Arizona Corporation Commission v. West Mining and Innovations, Inc. In a Temporary Cease and Desist Order dated March 13, 2009, the Commission alleged that Respondent posted an announcement on Craigs List that it was seeking a $50,000 investment to be repaid in gold to be derived from mining claims that Respondent did not own.

ARIZONA


UPDATE (As of August 19, 2009)

Form D Filing Practices Questions

1) Does Arizona accept the new Form D? Is it optional or mandatory, and until when? Yes. Issuers are required to file a copy of a notice on form D. See A.R.S. 44-1843.02(C). 2) Until what date will Arizona accept the Temporary Form D or old Form D? No timeframe 3) Will Arizona accept copies of an as-filed new Form D with the SEC or is a separate, manually signed copy required? Issuers are required to file a copy of a notice on form D. The notice shall contain a manual or facsimile signature. See A.R.S. 44-1843.02(C). 4) As applicable, may an issuer simultaneously check claims of exemption under Rules 504, 505, and 506 under Regulation D? As applicable 5) Must issuers still file a copy of the state Appendix from the old Form D? Issuers must file a copy of what they file with the SEC. See. A.R.S. 44-1843.02(C). 6) If no Appendix is required, must the filing letter give the amount sold in the state? Issuers must file a copy of what they file with the SEC. See. A.R.S. 44-1843.02(C). 7) Must the filing letter give the date of first sale in the state? Issuers must file a copy of what they file with the SEC. See. A.R.S. 44-1843.02(C). 8) Must issuers file a separate Form U-2? No. Issuers must file a copy of what they file with the SEC. See. A.R.S. 44-1843.02(C). 9) Can one Form D filing be used for multiple securities issued by different issuers in the same offering (e.g., debt of a parent company with guarantees by multiple subsidiaries)? Issuers must file a copy of what they file with the SEC. See. A.R.S. 44-1843.02(C).

ARIZONA


10) What events trigger the filing clock (e.g., receipt of signed subscription or cash, etc.) Sale 11) What is Arizonas enforcement position on failure of file or late filings? 12) Are annual renewal filing required and, if so, what is required (new fee, new U-2)? If not, must a copy of the electronic Form D be filed when it is renewed with the SEC? Must amendments also be filed? Issuers must file a copy of what they file with the SEC within 15 days of the first sale in or from Arizona. See. A.R.S. 44-1843.02(C). 13) Are there any unusual or special policies or procedures followed by the Division staff? No.

ARKANSAS


ARKANSAS STATE LIAISON REPORT

No report.

CALIFORNIA


CALIFORNIA STATE LIAISON REPORT

(Updated As of August 20, 2009) This report summarizes material developments affecting blue sky practitioners in this jurisdiction as of the date indicated above. Liaison: Keith Paul Bishop

Allen Matkins Leck Gamble Mallory & Natsis LLP 1900 Main Street, 5th Floor Irvine, California 92614-7321


Fax: Website:

[email protected] (945) 851-5428 (945) 553-8354 www.allenmatkins.com

Securities Administrator: Preston DuFauchard, Commissioner of Corporations

Department of Corporations 1515 K Street, Suite 200, Sacramento, CA 95814-4052


Website:

(916) 445-7205 not available http://www.corp.ca.gov

Statutes Title/Citation: Corporate Securities Law of 1968; Cal. Corp. Code 25000 et seq.

Internet Access: http://www.leginfo.ca.gov

Rules Name/Citation: California Code of Regulations 10 CCR 250.9 et seq. and

10 CCR 260.00 et seq.

Internet Access: http://www.oal.ca.gov

Highlights of Material Developments All Department of Corporation Offices will be closed on the first, second and third Fridays of the month beginning August 1, 2009. The closures are being made in connection with the Governor's Executive Order (S-13-09) that addresses the California's deficit and ongoing fiscal crisis.

mailto:[email protected]://www.allenmatkins.comhttp://www.corp.ca.govhttp://www.leginfo.ca.govhttp://www.oal.ca.gov

CALIFORNIA


Securities Statutory Developments On August 5, 2009, Governor Schwarzenegger signed AB 991 (Silva). This bill changes references to the NASDAQ Stock Market to reflect existing federal law designating that market as a national securities exchange. The bill also updates references to the American Stock Exchange, Pink Sheets and the National Association of Securities Dealers, Inc. and makes other technical and conforming changes. The following sections of the California General Corporation Law were amended: Cal. Corp. Code Sections 301.5, 301.7, 1300, 1301, 1502.1, 2115, and 2117.1. The following sections of the California Corporate Securities Law of 1968 were amended: Cal. Corp. Code Sections 25014.7, 25100, 25101, 25117, 25211, 25219, 25231, and 25247. This bill does not take effect January 1, 2010. Applicable State Statute of Limitations Periods Anti-Fraud Provisions of the Corporate Securities Laws (Corporations Code Section 25506). For proceedings commencing on or after January 1, 2005, an action must be brought before the expiration of five years after the act or transaction constituting the violation or the expiration of two years after discovery by the plaintiff of the facts constituting the violation, whichever first expires, if the action is to enforce liability created under the following sections of the Corporations Code:

Section 25500 (violation of Section 25400 (unlawful acts or misrepresentations to induce purchase or sale of securities or to manipulate price));

Section 25501 (violation of Section 25401 (sale or purchase of securities by means of written or oral communications containing false statements or omissions)); and

Section 25502 (violation of Section 25402 (purchase or sale of securities by a person who has access to material, non-public information)).

The above limitations also apply to actions maintained to enforce liability under Section 25504 (control person liability) and Section 25504.1 (liability of persons who materially assist) insofar as the actions relate to the sections above. Liability of Professionals (Corporations Code Section 25506.1). An action to enforce any liability under Section 25504.2 (liability of accountants, engineers, appraisers, etc.) must be brought within one year after discovery of the facts constituting the violation, or after such discovery should have been made by the exercise of reasonable diligence. In no event may such action be brought more than three years after the act or transaction constituting the violation.

CALIFORNIA


Unqualified Offers and Sales (Corporations Code Section 25507). An action to enforce liability under Section 25503 (generally failure to qualify the offer or sale or violation of a condition of qualification), or Section 25504 or Section 25504.1 insofar as the liability relates to Section 25503, must be brought before the expiration of two years after the violation or the expiration of one year after the discovery by the plaintiff of the facts constituting the violation, whichever shall first expire. Note that this period may be shortened if a written repurchase offer is made in accordance with Section 25503. Other causes of action (such as common law fraud, breach of contract, misrepresentation, etc.) may have different limitations periods. Applicable State Statutory Interest Rate Corporations Code Sections 25501 (rescission for violations of Section 25401 (false statements)), 25502 (damages for violations of Section 25402 (trading on the basis of inside information)); and 25503 (recovery of consideration or damages for failures to qualify or violations of qualification conditions) each provide for recovery of interest at the "legal rate" of interest. Other Notable Statutory Developments Corporations Code Section 25243.5 became operative on July 1, 2009. That statute prohibits a broker-dealer, investment adviser or their agents or registered representatives from using a senior specific certification, designation, credential or professional designation in connection with the offer, sale or purchase of securities or the provision of investment advice that indicates or implies that the person has special certification or training in advising or servicing senior citizens or retirees in such a way as to mislead. The statute includes a non-exclusive list of prohibited certifications, designations, credentials or professional designations. Securities Rules Developments Adopted Regulations No regulations have been adopted since last report. Proposed Amendments, Adoptions and Repeals Regulatory Clean-up (PRO 18/08): The Commissioner has proposed amendments to the following regulations: 260.004, 260.017.1, 260.101, 260.102.14, 260.165, 260.210, 260.211, 260.230.1, 260.231A, 260.236, 260.236.1, 260.237.2, 260.240, and 260.241.3; and to repeal the following regulations: Sections 260.103.3 and 260.237.1. The Commissioner is proposing these changes to update and correct these regulations. The comment period for this rulemaking ended

CALIFORNIA


on April 27, 2009.1 The Commissioner is expected to close the rulemaking record for this rulemaking package and submitted the proposed regulations to the California Office of Administrative Law (the "OAL") on August 18, 2009 (OAL File No. 2009-0818-01S). Under California's Administrative Procedure Act (the "APA"), the OAL has 30 working days in which to review the rulemaking record to determine whether it demonstrates that the rulemaking agency satisfied the procedural requirements of the APA, and to review regulations for compliance with the six standards. The review period for these regulations will expire on September 30, 2009. If approved, the OAL files the regulations with the California Secretary of State. Generally, regulations become effective on the thirtieth day after filing with the Secretary of State. Regulatory Clean-Up (Part 2) (DOC File No. PRO 17/03): The Commissioner has proposed to make technical and clarifying amendments to Sections 260.102.8(b), 260.103.6, 260.105.15, 260.113, 260.140.8(b)(4), 260.140.42(e), 260.140.71.2, 260.140.114.1(c), 260.151(a), 260.236(c)(3)(C), 260.608, 1457(d), 1950.122.1, 2020(c) and 2030; to amend the Note after Subchapter 6 of the California Finance Lenders Law; and to repeal Sections 250.50 and 250.51 of Title 10 of the California Code of Regulations under the Corporate Securities Law of 1968, California Finance Lenders Law, California Residential Mortgage Lending Act, and California Deferred Deposit Transaction Law. The period within which to comment on this proposed regulatory action ended on June 15, 2009. On August 11, 2009, the Commissioner closed the rulemaking record for this rulemaking package and submitted the proposed regulations to the OAL (OAL File No. 2009-0811-025). The OAL has until September 23, 2009 to review the proposed rules. Stock Exchange Name Changes: The Commissioner has proposed amendments to Sections 260.101.2, 260.103.4, 260.105.7, 260.105.17, 260.105.33, 260.105.34, 260.217, 260.230, 260.241.4, and 260.242; repeal Sections 260.105.37 and 260.204.11. These changes were proposed to reflect changes in the names and functions of various exchanges. The comment period for these regulations expired on November 24, 2008. Investment Advisers: The Commissioner has proposed amendments to the following regulations: Sections 260.231, 260.235, 260.237.2, 260.238 & 260.241.3. The Commissioner is also proposing to repeal Section 260.231.1 and to adopt Sections 260.235.5, 260.238.1, 260.238.2, 260.238.3 & 260.238.4. According to the Commissioner, these changes are being proposed "to increase uniformity with investment adviser regulation in other states, as well as with recently adopted and long-standing Securities and Exchange Commission (SEC) rules and interpretations". The comment period (which had been extended) ended on February 1, 2008. It is anticipated that the Commissioner will give notice of changes to the proposed text of the rules. This would result in at least a 15-Day comment period. Broker-Dealer Safeharbor: It is anticipated that the Commissioner will publish a rulemaking proposal in September that would mirror the Securities and Exchange Commission's safe harbor rule for associated persons of an issuer (Rule 3a4-1). This proposal is in response to the California Court of Appeal decision in People v. Cole, 156 Cal.App.4th 452 (2007). 1 On June 1, 2009, the Commissioner gave notice of the proposed final text which included changes to Section 260.165 (form of consent to service of process). The comment period on the revised text expired June 17, 2009.

CALIFORNIA


See Bishop, A Shot Not Heard-The Court of Appeal Holds that An Issuer's Directors and Officers Must be Licensed as Securities Broker-Dealers, Cal. Bus. Law News (No. 3, 2008). Administrators Staffing Changes Robert Van Der Volgen, former Acting General Counsel and Deputy Commissioner of the Securities Regulation Division has retired from state service, and accepted the general counsel position with LACERA, the administrator of LA countys retirement fund. Administrative Orders and Announcements On March 24, 2009, the Commissioner issued Release 120-C which set forth the Department's filing requirements for Form D. The release is available at: http://www.corp.ca.gov/Commissioner/Releases/pdf/120C.pdf. On August 17, 2009, the Commissioner issued a revision to Release No. 87-C. The revised release certifies the NASDAQ Capital Market under Corporations Code Section 25100(o). The revised release is available at: http://www.corp.ca.gov/Commissioner/Releases/pdf/87c.pdf. On August 17, 2009, the Commissioner issued a revision to Release No. 88-C. The revised release certifies the NASDAQ Capital Market under Corporations Code Section 25101(a). The revised release is available at: http://www.corp.ca.gov/OLP/PDF/Releases/88c.pdf Administrative Enforcement Proceedings See report of Subcommittee on Enforcement. Securities-Related Case Law Developments Oravecz v. New York Life Ins. Co., 174 Cal. App. 4th 1114 (2009). This case involved, inter alia, a common law claim against a broker for breach of fiduciary duty. The trial court relied on federal precedent that requires an affirmative showing that the stockbroker exercised discretionary trading authority over the client's accounts. The Court of Appeal reversed based on California precedent. The court also held that the defendant had no duty to supervise a broker's unauthorized sale of unapproved securities. Bains v. Moores, 172 Cal. App. 4th 445 (2009). On July 8, 2009, the California Supreme Court denied review and a request for de-publication. This is the first reported California appellate decision to consider the so-called "group pleading" doctrine in the context of a motion for summary judgment. The "group pleading" doctrine (aka "group published doctrine") allows a party in a fraud action to attribute collective statements in corporate publications to individuals. The Court of Appeal concluded that the group pleading doctrine does not apply in determining whether a party has presented sufficient evidence of its claims to avoid summary judgment,

http://www.corp.ca.gov/Commissioner/Releases/pdf/120C.pdfhttp://www.corp.ca.gov/Commissioner/Releases/pdf/87c.pdfhttp://www.corp.ca.gov/OLP/PDF/Releases/88c.pdf

CALIFORNIA


under California law. The Court of Appeal also assumed, but did not decide, that suspicious stock sales may raise an inference of scienter under California law. Other Noteworthy Practice Developments California Registered Warrants. On July 2, 2009, the State of California began issuing IOUs to vendors and other creditors. These IOUs are called "registered warrants" even though they have not been registered with the U.S. Securities & Exchange Commission (SEC) or the California Department of Corporations. They differ from regular warrants because they are marked "REGISTERED" and have a special endorsement stamp on the back. A regular warrant is redeemable by the California Treasurer after it is issued, but a registered warrant cannot be redeemed until it matures. In the case of the registered warrants now being issued, the maturity date is on or after October 2, 2009 (assuming California will then have the money to redeem them). If the state has enough money before that date, the registered warrants may be redeemed earlier. The registered warrants bear interest at the rate of 3.7% per annum. A registered warrant can be identified by the word "REGISTERED" on the front. The warrants are green in color. On July 9, 2009, the staff of the U.S. Securities & Exchange Commission issued a statement that California's registered warrants are securities under the federal securities laws. They have also issued an investor alert concerning California's registered warrants. The staff's statement (which is not binding on the full Commission or the courts) points out that federal securities laws, including the anti-fraud provisions, will apply to the offer and sale of the registered warrants. This means that buyers and sellers of the registered warrants will have rights and remedies under the securities laws and that the SEC may take action against persons who violate the securities laws with respect to the registered warrants. In addition, persons acting as intermediaries between buyers and sellers of the warrants may need to register as brokers, dealers or municipal securities dealers, or as alternative trading systems or national securities exchanges. The Municipal Securities Rulemaking Board (MSRB) has issued a notice advising that all dealers who sell or trade municipal securities must be registered with the MSRB and must comply with MSRB rules on professionalism and fair practice. For more information on the application of federal and state securities laws to California's registered warrants, see Keith Bishop, "California Owes an Explanation on Securities Rule," Los Angeles Daily Journal (July 13, 2009). On August 13, 2009, the California Controller announced that California would stop issuing registered warrants on September 4, 2009. See http://www.sco.ca.gov/Press-Releases/2009/08-13-09Chiangnewsrelease.pdf.

http://www.sco.ca.gov/Press-Releases/2009/08

CALIFORNIA


FORM D FILING PRACTICES SUPPLEMENT See Commissioner's Release 120-C (March 24, 2009) available at http://www.corp.ca.gov/Commissioner/Releases/pdf/120C.pdf

http://www.corp.ca.gov/Commissioner/Releases/pdf/120C.pdf

COLORADO


COLORADO STATE LIAISON REPORT (Updated As of August 2009)

This report summarizes material developments affecting blue sky practitioners in this jurisdiction as of the date indicated above. Liaison: Robert J. Ahrenholz, Esq.

Kutak Rock LLP 1801 California Street, Suite 3100 Denver, CO 80202


Fax: Website:

[email protected] 303-297-2400 303-292-7799 kutakrock.com

Securities Administrator: Fred J. Joseph, Colorado Securities Commissioner

Department of Regulatory Agencies, Division of Securities 1560 Broadway, Suite 900 Denver, CO 80202


Website:

303-894-2320 303-861-2126 http://www.dora.state.co.us/securities

Statutes Title/Citation: Colorado Securities Act, COLO. REV. STAT. 11-51-101 through 908

Internet Access: http://www.dora.state.co.us/securities/pdf forms/forms/statute2007.pdf

Rules Name/Citation: Colorado Division of Securities Rules, 3 COLO.CODE REGS. 704-1,

Rules 51-1 through 51.9.2

Internet Access: http://www.dora.state.co.us/pdf_forms/Forms/Rules%202007.pdf

Highlights of Material Developments The Colorado Division of Securities is a unit of the Colorado Department of Regulatory Agencies. Its mission is to protect investors and maintain public confidence in the securities markets while avoiding unreasonable burdens on participants in the capital markets. In this capacity, the Colorado Division of Securities is responsible for the administration and enforcement of the Colorado Securities Act, the Colorado Community Code, the Colorado Municipal Bond Supervision Act, the Local Government Investment Pool Trust Fund

mailto:[email protected]://www.dora.state.co.us/securities/pdfhttp://www.dora.state.co.us/pdf_forms/Forms/Rules%202007.pdf

COLORADO


Administration and Enforcement Act and the rules and regulations promulgated thereunder. The Colorado Division of Securities licenses and regulates stockbrokers and investment advisors and the securities they offer, sell and advise about in the State of Colorado. For additional information, visit the Colorado Division of Securities Website at www. dora.state.co.us.2 On April 30, 1998, Governor Romer signed into law House Bill 98-1244, a bill for the regulation of investment advisory activities. Under the law, the Colorado Securities Commissioner and Securities Division will license and regulate state-based investment advisers and investment adviser representatives who work in Colorado, effective January 1, 1999. An Investment Adviser (IA) is a person (such as company) who, for a fee, provides advice to customers about investing in securities. An Investment Adviser Representative (IAR) is an individual who works for an IA and provides investment advisory services to customers. The Colorado Investment Advisor law was enacted in the context of the federal National Securities Markets Improvement Act of 1996 (NSMIA) under which Congress split regulatory responsibility for investment advisers between the SEC and state securities regulators. Investment Advisor firms with more than $25 million in assets under management (Federal Covered Advisers or FCAs) are regulated exclusively by the SEC. Colorado regulates IA firms (state IAs) located in Colorado with assets under that threshold. Investment adviser representatives (IARs), individuals with a place of business in Colorado who work for FCAs or state Investment Advisers in providing investment advice to customers, need a Colorado IAR license. To be licensed in Colorado, the filing of Investment Adviser and Investment Adviser Representative License applications and fees is required. Investment Adviser Representative license applicants are required to take and pass a minimum competency examination or provide proof of alternate qualifications. Annual fees will be required each year. Licensees are subject to inspection, dishonest and unethical business practice rules, customer disclosure requirements and anti-fraud provisions. A Federal Covered Adviser with a place of business in Colorado, or who employs or otherwise engages an individual with a place of business in this state to act as an Investment Adviser Representative, is required to make a notice filing.3 Securities Statutory Developments The First Regular Session of the Sixty-seventh General Assembly convened on January 7, 2009 and adjourned on May 6, 2009. During that session, the General Assembly voted to allow two new examiner positions to the Division of Securities. This became effective July 1, 2009 and the division is currently in the

-------+2 The information contained in the foregoing paragraph was obtained at http://www.dora.state.co.us/securities/ (last visited August 14, 2009). 3 The information from the foregoing paragraphs dealing with investment advisors was obtained at http://www.dora.state.co.us/securities/ialaw.htm (last visited August 14, 2009).

http://www.dora.state.co.us/securities/http://www.dora.state.co.us/securities/ialaw.htm

COLORADO


process of filling these positions. No material changes to the securities statutes were made during the session. Applicable State Statute of Limitations Periods C.R.S. 13-80-102(i) The applicable statute of limitations is two (2) years. Applicable State Statutory Interest Rate COLO. STAT. ANN. 5-12-102 (i)(b) Interest is at the rate of eight per cent (8%) per annum compounded annually. Other Notable Statutory Developments There have not been any new statutory developments since the March 2009 update. Securities Rules Developments On December 1, 2008, the following rules became effective:

3CCR 704-1 Rule 51-3.5 Notice of Intention to Sell In Reliance on Investment Company Exemption

under Section 11-51-307(1)(k), C.R.S. Rule 51.3.7 Notification of Exemption under Section 11-51-308(1)(p), C.R.S., for Certain

Securities or Transactions Exempt from Registration under the 33 Act. Rule 51-4.7 Unfair and Dishonest Dealings (H)(1) Relates to the use of a senior specific

certification or designation in connection with the offer or sale or purchase of securities, or the provision of advice, analyses or reports relating to securities.

Rule 51-4.8(IA) Dishonest and Unethical Conduct (V)(1) Relates to the use of a senior specific certification or designation in connection with the offer, sale or purchase of securities, or the provision of advice, analyses or reports relating to securities.

Administrators Staffing Changes There have not been any staffing changes since the March 2009 report, except for the

approval by the General Assembly for the addition of two new examiner positions. Administrative Orders and Announcements Since the March 2009 report, there have been no material administrative orders and announcements. Administrative Enforcement Proceedings (Note: enforcement matters are separately reported by the Subcommittee on Enforcement, contact Mike Underwood, Subcommittee Chair, at [email protected]; do not report these matters here.)

mailto:[email protected]

COLORADO


Securities-related Case Law Developments There have not been any court decisions addressing novel questions of law since the March 2009 report. Other Noteworthy Practice Developments There have not been any material developments since the March 2009 update.

COLORADO


FORM D FILING PRACTICES SUPPLEMENT Does your jurisdiction accept the new Form D? Is it optional or mandatory, until when? As of March 16, 2009 Colorado will require all filers to submit their forms electronically on EDGAR. The state will send an e-mail after submission with a notification of the filing status. Until what date will your jurisdiction accept the Temporary Form D or old Form D? Both forms will be accepted up until March 16, 2009. As applicable, may an issuer simultaneously check claims of exemption under Rules 504,

505 and 506 under Regulation D? No, it is not applicable because each rule has a different requirement. Colorado allows for only one choice per form. Must issuers still file a copy of the state Appendix from the old Form D? No, Colorado never adopted that requirement. If no Appendix is required, must the filing letter give the amount sold in the state? No. Colorado accepts whatever appears on the new form, which does not include an Appendix. Must the filing letter give the date of first sale in the state? No, Colorado does not have that requirement. Must issuers file a separate Form U-2? No, as it is built in to the electronic Form D, which is sufficient for Colorado. Can multiple offerings by the same issuer be covered in one Form D? Colorado accepts what the SEC accepts on Form D. Can one Form D filing be used for multiple affiliated issuers? Yes, Rule 51.3.7 adopted changes to allowing it to mirror the SECs ruling. What events trigger the filing clock (e.g., receipt of signed subscription or cash, etc)? The filing clock is triggered when the sale is made, when the money is paid.

COLORADO


What is the states enforcement position on failure to file or late filings? Colorado does not have the authority to impose fines. The state takes the SEC position, in that if a filer qualifies for an exemption, Colorado will accept it. If a filer is extremely late, Colorado will ask for a letter of explanation. Are annual renewal filings required and, if so, what is required (new fee, new U-2?)? If not,

must a copy of the electronic Form D be filed when it is renewed with the SEC? Must amendments also be filed?

Colorado will accept what the SEC accepts. If a filing is made at the SEC, Colorado will receive a copy as well. There is only one fee. Amendments do not have to be filed. Are there any unusual policies or procedures? There are no unusual policies or procedures at this time.

CONNECTICUT


CONNECTICUT STATE LIAISON REPORT

As of March 31, 2009 This report summarizes material developments affecting blue sky practitioners in this jurisdiction as of the date indicated above. Liaison: Richard Slavin, Liaison

Cohen and Wolf, P.C. 320 Post Rd. West

Westport, Connecticut 06880 Email: [email protected] Telephone: 203-341-5310 Cell phone: 203-556-8959 Fax: 203-341-5311 State Administrator: Howard Pitkin Banking Commissioner Ralph Lambiase Director Securities and Business Investments Division Connecticut Banking Department 260 Constitution Plaza Hartford, CT 06103 Main Telephone: 860-240-8299 Main Fax: Internet: http://www..ct.gov/dob Short Title/Citation: Connecticut Uniform Securities Act, Sections 36b-3 to 36b-33 of

the Connecticut General Statutes Rules Name/Citation: Regulations of Connecticut State Agencies, Section 36b-31-2 to

36b-31-31f Highlights of Material Developments None to report. Securities Statutory Developments (Proposed Legislation) The following bills have been raised:

mailto:[email protected]://www..ct.gov/dob

CONNECTICUT


Raised Bill No.953: This bill would apparently amend the Connecticut Uniform Securities Act and add definitions of hedge fund, institutional investor, investment assets, investor, major litigation, manager and material to the statute. The essential requirements of this bill are the following:

1. On or after January 1, 2011, no hedge fund shall consist of individual investors who, individually or jointly with a spouse, have less than two million five hundred thousand dollars in investment assets or institutional investors that have less than five million dollars in assets.

2. A hedge fund manager must disclose to each investor or prospective investor in a

hedge fund, not later than thirty days before any investment in the fund, any financial interests or other interests the manager may have that conflict with or laree likely to impair the managers duties and responsibilities to investors.

3. The manager must disclose in writing to each investor in a hedge fund any

material change in investment strategy and philosophy of the fund and the departure of any individual employed by such fund who exercises significant control over the investment strategy or operation of the fund, the existence of side letters provided to investors, and any major litigation involving the fund or governmental investigation of the fund.

4. On January 1, 2010 and annually thereafter, the manager shall disclose in wiring

to each investor the fee schedule to be paid by the hedge fund including but not limited to management fees, brokerage fees, and trading fees and a financial statement indicating the investors capital balance that has been audited by an independent auditing firm.

5. The Banking commissioner may adopt regulations.

Neither this bill nor the Attorney Generals bill, which tracks most of this language, give the Attorney General enforcement powers and the bill seems to continue to vest jurisdiction over hedge funds in the Banking Commissioner, who is the securities regulator in Connecticut. The hedge fund definition includes any investment company as defined in Section 3 (a) (1) of the Investment Company Act of 11940, located in this state (A) that claims an exemption under 3(c) (1) or Section 3(c) (7) of the Investment Company Act of 1940 whose offering of securities is exempt under the private offering safe harbor criteria in Rule 506 of Regulation D of the Securities Act and that meets any of the criteria established by the Banking commissioner in regulations. A hedge fund is located in Connecticut if it has an office in Connecticut where employees regularly conduct business on behalf of the hedge fund. If passed, I think the legislature would be taking the position that there is no preemption as this legislation does not impose any regulation of a private offering under Rule 506 but simply

CONNECTICUT


regulates the hedge fund which has raised money under Rule 506. given the definition of hedge fund under this proposal no fund located in Connecticut could raise money anywhere from individuals who have less than $2,500,000 in investment assets or form institutional investors who have less than $5,000,000 in assets. Clearly this legislation adopts some of the concepts of the proposed Regulation D which have not yet been adopted by the SEC. its a good question whether the legislation would withstand a preemption challenge under Section 18. it certainly appears to be an issue in this form. The bill also defines institutional investor. In Section 36b-21(b) (9) there is an exemption for a sale to an institutional buyer: which has not really been defined under the Act. Arguably this definition would define an institutional buyer as, among other definitions, as a corporation or any other legal entity. Raised Bill 6477 This bill creates a licensing requirement for a hedge fund or a private capital fund and leaves the definitions and procedures for the Banking Commissioner. Raised Bill No. 6480 This bill requires any hedge fund or private capital fund domiciled in Connecticut that receives money from pension funds domiciled in Connecticut to disclose to each prospective pension investor in those funds, upon request, financial information including but not limited to, detailed portfolio information relative to the assets and liabilities of those funds. Whats going to happen? Certainly no one knows yet but the popular notion is that Connecticut legislators want to enact some kind of regulation of hedge funds. There is some sense that these kinds of regulatory requirements can protect Connecticut citizens and pension funds from the Madoff schemes, from Ameranth, or Bayou Fund type problems. On the other hand is the continuing realization that Connecticut is probably the second or third largest domicile for hedge funds and that the tax revenue and jobs, even at the current diminished levels, are not items that the legislature would like to see moving across the border to New York. More bill background The legislation was introduced by some of the same legislators who have introduced hedge fund legislation in prior years. While some of the provisions of these bills are different from those efforts, there is some sense that they may die in committee. In prior years the Attorney General has also submitted a bill which has not progressed beyond the beginning stages. The Banking Department has not taken a position on any of the bills; however, the Banking Commissioner may testify in the coming weeks. There is so some sense that Connecticut should wait to see what Congress does. Under existing law the Attorney General

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can only act to enforce the Connecticut Uniform Securities Act if the Banking Commissioner makes a referral to him for civil action. I spoke to Ralph Lambiase, the long-time Director of the Securities and Business Investments Division of the Banking Department. While Ralph takes no position on the existing bills, he does have ideas about potential hedge fund abuses. He advocates a requirement that hedge funds employee third party administrators to account for the funds invested in hedge funds and for fair valuations. No one should be surprised at Ralphs position as it basically is a follow-the-money kind of solution to the problem. He would like to see the elimination of as much potential for conflict of interest as possible on the part of hedge fund managers in any kind of legislation in connection with hedge funds. The Connecticut legislative session may last through May and into June. There is certainly enough time to pass legislation, if there is truly a desire to make that happen. I have not attached the Attorney General bill as it is quite similar to Raised Bill No. 953 which I had sent around before. Securities Rules Developments None to report. Administrative Orders and Announcements None to report. Administrative Enforcement Proceedings (See the current report to the Subcommittee on Enforcement) Securities-related Case Law Developments None to report. Other Statutory Developments None to report. Administrators Staffing Changes The Securities and Business Investments Division has had few changes over the past 20 years. Most of the staff has worked at the Banking Department for at least that long. This year Commissioner Howard Pitkin reorganized the Departments Legal Division and assigned individual lawyers to each substantive Division. Now the Securities and Business Investments Division have two attorneys who handle orders, participate in onthe-record testimony, and prosecute administrative matters. Attorneys Jesse Silverman and Paul Bobruff now are part of

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the Securities Division. Both have worked at the Banking Department for a number of years. Mr. Silverman has handled securities matters throughout his tenure. Other Noteworthy Practice Developments None to report.

RULE 506 NOTICE FILINGS

Frequently Asked Questions (FAQs)

Instructions

The National Securities Markets Improvement Act of 1996 ("NSMIA") preempted state review of offerings made under Rule 506 of Regulation D, but did not impact state antifraud or licensing authority. Under Section 36b-21(e) of the Connecticut Uniform Securities Act, Rule 506 issuers must make a notice filing within 15 days after the first sale in this state.

What to File

1. Nonrefundable $150 fee payable to "Treasurer, State of Connecticut" 2. Consent to Service of Process (Form U-2) naming the Banking Commissioner as agent for

service (see chart below) 3. New Form D or Temporary Form D (see chart below). Note: Only one New Form D or

Temporary Form D must be filed. 4. Completed Sales Agent/Broker-dealer Questionnaire or cover letter containing the same

information (see chart below)

Impact of SEC Release No. 33-8891 On February 6, 2008, the Securities and Exchange Commission issued Securities Act Release No. 33-8891 (www.sec.gov/rules/final/2008/33-8891.pdf). The Release requires that Form D be filed electronically through EDGAR effective March 15, 2009. A new version of Form D ("New Form D") was created for this purpose. EDGAR is an online database accessible to anyone having a computer with Internet access. From September 15, 2008 to March 15, 2009 (the Transition Period) Form D filers may elect to file Form D 1) in paper form using Temporary Form D (which is similar to current Form D); 2) in paper form using New Form D; or 3) electronically using New Form D.

To take advantage of the new technology, the Division is modifying its filing procedures for Form D filers.

http://www.sec.gov/rules/final/2008/33-8891.pdf

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The changes affect filings made under Rules 504, 505 and 506 of Regulation D as well as those under Section 4(6) of the Securities Act of 1933.

You will benefit the most if you electronically file with the SEC rather than continuing to file via paper format.

We have summarized the changes below for Rule 506 filings.

http://www.ct.gov/dob/cwp/view.asp?a=2255&q=299272&dobNAV_GID=1662 - chart#chart New Form D Filer (Electronic Filer) New Form D Filer (Paper Filer)

Temporary (Old) Form D Filer (Paper)

Timing Within 15 days after first sale in state Within 15 days after first sale

in state Within 15 days after first sale in state

$150 Fee Payable to "Treasurer, State of Connecticut"

Remit to Division Remit to Division Remit to Division

Consent to Service of Process

No separate filing No separate filing File Form U-2 with Division

Form D File New Form D with Division File New Form D with

Division File Temporary Form D with Division

Form D Appendix* Not required Not required Include Signed Form D Typed signature accepted** Required Required Sales Agent/Broker- Dealer Questionnaire or Equivalent

No separate form if covered by New Form D

No separate form if covered by New Form D

Required

Form D Amendments

Not required (viewable online) Required for material changes

Required for material changes

*In appropriate instances, the Commissioner reserves the right to request sales reports (see Release No. 33-8891, n. 87; C.G.S. Section 36b-21(e)). **SEC authentication procedure relied upon for E-filers Forms (Forms are in PDF format unless indicated otherwise. PDF handling help .)

http://www.ct.gov/dob/cwp/view.asp?a=2255&q=299272&dobNAV_GID=1662

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New Form D (11 pages; file size 1.52 MB) Temporary (Old) Form D (9 pages; file size 48 KB)

Sales Agent/Broker-dealer Licensing Questionnaire (1 page, file size 56 KB)

Form U-2 (Consent to Service of Process) ( 4 pages, file size 104 KB)

SEC Forms (external link)

Resources

Connecticut Statutes and Regulations

Securities Lawyer's Deskbook (Univ. of Cincinnati College of Law)

EDGAR (external link)

Small Business: A Guide to Raising Capital ( educational publication)

DELAWARE


DELAWARE STATE LIAISON REPORT

No report.

FLORIDA


FLORIDA STATE LIAISON REPORT

(Updated As of August 31, 2009) This report summarizes material developments affecting blue sky practitioners in this jurisdiction as of the date indicated above. Liaison: Donald A. Rett

Law Office of Donald A. Rett 1660 Metropolitan Circle Tallahassee FL 32308

Email: [email protected] Telephone: 850.298.4454 Cell phone: 850.566.0473 Fax: 850.298.4454 Securities Administrator: Michael Gross, Esq. Acting Director

Division of Securities 200 E. Gaines Street Tallahassee FL 32399-0372

Main Telephone: 850.410.9805 Main Fax: 850.410.9748 Internet: http://www.flofr.com

http://www.fldfs.com Statutes Title/Citation: Florida Securities and Investor Protection Act Chapter 517, Florida Statutes (Either web address, above, should get you there) Rules Name/Citation: Chapter 69W, Florida Administrative Code (Either web address, above, should get you there) Highlights of Material Developments In August, 2009, the Florida Financial Services Commission appointed J. Thomas Cardwell as the new Commissioner of the Office of Financial Regulation (OFR). Previously, Mr. Cardwell had been a partner of the Akerman Senterfitt law firm, and Chair of their Financial Institutions practice. Securities Statutory Developments (see other attachment re legislation)

mailto:[email protected]://www.flofr.comhttp://www.fldfs.com

FLORIDA


Applicable State Statute of Limitations Periods For private actions, see, section 95.031 and 95.11(4)(e), of the Florida Statutes. Generally speaking, its two years from knew or should have known, with an absolute of five years from the date of the violation. For enforcement actions, new section 517.191(7) provides that the period of time will range between six years from the date of knew or should have known, but not more than eight years from the date of occurrence. Applicable State Statutory Interest Rate The formula is found at section 55.03, Florida Statutes, and is currently (for 2009) set at eight percent (8%) per annum. The Chief Financial Officer is mandated by law to re-set this number on an annual basis; go to www.myfloridacfohome; click onto search by subject; select the letter i, which will take you to interest rate, statutory. Securities Rules Developments (separate attachment) Administrators Staffing Changes (Mentioned Above) Administrative Orders and Announcements None noted Administrative Enforcement Proceedings (See the current report to the Subcommittee on Enforcement) Securities-related Case Law Developments None reported at Florida Bar website. Other Statutory Developments The current edition of RUSA has never been adopted in FL. Administrators Staffing Changes (See above) Other Noteworthy Practice Developments Nothing to report Form D Filing Practices Supplement Florida does not require Form D filing(s).

FLORIDA


FLORIDA ENACTS SWEEPING NEW CHANGES TO ITS SECURITIES LAW Donald A. Rett, Esq,

The recently concluded session of the Florida legislature added substantial regulatory authority to the Florida Office of Financial Regulation (OFR) and other State agencies to enforce new powers granted under a 2009 amendment to the Florida Securities Act (FSA). Initially, the Florida Office of Statewide Prosecution may now investigate any criminal violation of the FSA, while for the first time ever the Florida Attorney Generals Office may investigate violations of the Commodity Exchange Act, as well as violations of the FSAs anti-fraud provisions. The OFR has been granted authority to apply to a court to impose monetary civil penalties for FSA violations, ranging from $10,000 to $50,000 for natural persons, and from $25,000 to $250,000 for other persons. Administrative fines, previously capped at $5,000 per violation, are now pegged at $10,000. The OFR may deny an applicant (permanently, or for a specified time period) from submitting an application or notification for a license or registration where such person is found to have violated and provision of the FSA, any rule or order adopted by the OFR, or any written agreement entered into with such agency. Floridas existing statute of limitations has been greatly extended when an enforcement action is brought, ranging from within six years following discovery of a cause of action (knew or should have known), but not beyond eight years following the date of the violation. The new law gives the Financial Services Commission (FSC) the authority to establish (by rule) disciplinary guidelines by which an applicant may be disqualified from applying for licensure, based upon criminal convictions, nolo contendere pleas, or pleas of guilt (regardless of whether adjudication was withheld. The disqualifying periods range from five years for a misdemeanor, to fifteen years for a felony, and may be applied against an applicant; any partner , member, officer or director of the applicant, or any person having a similar status or performing similar functions, or any person directly or indirectly controlling the applicant. Registrations granted to, and applications from, brokerage firms, associated persons, investment advisers, even branch offices may be revoked or denied where any member, principal, or director of the applicant or registrant or any person having a similar status or performing similar functions; or any person directly or indirectly controlling the applicant or registrant has violated any provision of the FSA (or any rule or order under that statute), or has committed any of the enumerated misdeeds in section 517.161 of the FSA or the rules promulgated under that section. Also brokerage firms, associated persons, investment advisors, and even branch office face summary suspension should such registered entity fail to provide to OFR following a written request - any of the books and records required to be maintained by the FSA.

FLORIDA


As part of the new legislation (discussed above), the Florida legislature delegated to the Commission the authority to adopt by rule disciplinary guidelines applicable to each ground for disciplinary action that may be imposed by the OFR. To that end, the OFR issued for comment proposed new regulation 69W-600.0021, Effect of Law Enforcement Records on Application for Registration as Associated Persons. The proposed rule deals with: 1) the extensive documentation that must be furnished by individuals with criminal incidents in their background; 2) delineates what must be furnished if an applicant can not furnish the required documentation; 3) provides penalties for failure to fully disclose prior criminal histories; 4) classifies past crimes into Class A (mandatory 15-year disqualification), and Class B (mandatory 5-year disqualification; and 4) other provisions. As I write this piece, the comment period (which was due to end September 4th) appears to have not provoked any request for a rule-making, development workshop.

GEORGIA


GEORGIA STA

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