Goldsholle

DISCUSSION

California law makes it unlawful for “any person, in connection with the offer, sale, or purchase of a security, directly or indirectly, to . . . [m]ake an untrue statement of material fact or omit to state a material fact necessary to make the statement made, in light of the circumstances under which they were made, not misleading.” (§ 25401.)2 The same conduct renders a seller, purchaser or their agent civilly liable for damages. (§ 25501 [civil liability of seller or purchaser], 25504 [civil liability of agent]; see also Moss v. Kroner (2011) 197 Cal.App.4th 860, 873.) California securities law looks to its federal counterpart, (Viterbi v. Wasserman (2011) 191 Cal.App.4th 927, 937), and federal law provides that “‘[v]ague, generalized, and unspecific assertions’ of corporate optimism or statements of ‘mere puffing’ cannot state actionable material misstatements of fact under federal securities laws. [Citations.]”

Unless otherwise indicated, all further statutory citations are to the Corporations Code. Section 25401 was amended in 2014 to prohibit additional conduct.

3 (In re Cornerstone Propane Partners, L.P. (2005) 355 F.Supp.2d 1069, 1087.) Such…