Cal. Gov. Code § 5971
In selecting any person to provide underwriting services, including financial, advisory or other financial services, involving the issuance of securities, the state or the legislative body of any local governmental entity may consider, among other things, prior conduct of the person, or any employee of the person, including, but not limited to, acts constituting fraud or a violation of state or federal securities law and that resulted in the issuance by, or on behalf of, a governmental regulatory agency of a cease and desist order, a preliminary injunction that has not been dissolved by court order or replaced by a permanent injunction or a permanent injunction, censure, or any other administrative or judicial enforcement order.
Ca. Gov. Code § 5971