People v. Simon

2 Analyses of this case by attorneys

  1. Why Privity Matters

    Allen MatkinsMay 13, 2022

    In ruling on the defendants' motion to dismiss, Judge Chesney explained:With respect to § 25401, the Court agrees. In particular, although, as plaintiffs point out, the Corporate Securities Act is "modeled" after provisions of federal securities statutes, seePeople v. Simon, 9 Cal. 4th 493, 509-10 (1995),the California Supreme Court has expressly held a private cause of action for a violation of § 25401 can only be brought by a person in "privity of contract" with the defendant, seeMirkin v. Wasserman, 5 Cal. 4th 1082, 1104 (1993). As plaintiffs acknowledge, the relevant contract here, namely, the Purchase Agreement, is signed only by Baltequera. Consequently, as neither Dcoop nor Olives Way entered into a contract to invest in Bell-Carter Foods, Dcoop and Olives Way lack statutory standing to bring a claim under § 25401.With respect to § 25400, however, the California Supreme Court has held privity of contract is not "require[d]."

  2. What Type Of Crime Is Securities Fraud In California?

    Allen MatkinsKeith BishopJanuary 19, 2021

    Scienter requires either (i) knowledge of the false or misleading nature of the representation or of the materiality of the omission, or (ii) criminal negligence in failing to acquire this knowledge. People v. Simon,9 Cal. 4th 493, 497 (1995). The Court noted that"Critically, criminal negligence in this context refers to an alternative way of proving the knowledge element.