Securities transactions: qualification requirements, exemptions, and liability.

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, as specified, unless exempt from the qualification requirements. That law exempts, among other transactions, certain transactions not involving any public offering, as prescribed. That law also 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 establish a new exemption from the qualification provisions for an offer or sale of any security for which the issuer is a California or foreign corporation that is not a "blind pool" company, as defined by the Commissioner of Financial Protection and Innovation, is not issuing fractional undivided interests in oil or gas rights or other similar mineral rights, is not an investment company subject to the federal Investment Company Act of 1940, and is not subject to certain reporting requirements of the Securities Exchange Act of 1934. The bill would require, among other criteria, that the offer or sale be conducted in accordance with certain requirements of federal law, except as provided, and that the issuer file a notice of transaction at least 15 days prior to the publication of an initial offer of these securities. 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 the security with interest thereon at the legal rate or for damages, as specified. This bill would provide for the recovery of reasonable attorney's fees, as specified. Existing law imposes liability on any person who engages in specified unlawful activity to the person who purchases a security from them or sells a security to them, and authorizes the purchaser or seller to sue either for rescission or for damages. The bill would require the court to award reasonable attorney's fees, as specified. The bill would also make technical changes.