Corporate securities: unlawful conduct: regulations.

The Corporate Securities Law of 1968 generally regulates the offer and sale of corporate securities within the state, and specifically makes specified conduct with regard to the offer and sale of corporate securities unlawful. That law requires the Commissioner of Business Oversight to perform specific oversight duties regarding the offer and sale of securities and provides that any willful violation of that law is a crime. Existing law prohibits any person from selling a security in this state by means of a communication that includes an untrue statement of material fact or that omits a material fact necessary in order to make the statements made, in light of the circumstances under which the statements are made, not misleading. This bill would require the commissioner to adopt regulations to prohibit fraudulent and manipulative practices by persons undertaking short sales in the securities market. By expanding the scope of a crime, this bill would impose a state-mandated local program. (2) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.