Lawmakers to Vote on Regulatory Speedup

The state Senate Judiciary Committee today is scheduled to vote on a measure designed to lower the costs of raising capital for small businesses by speeding up the regulatory approval process but increasing enforcement of laws against securities fraud. Sponsored by the state Department of Corporations, the Capital Formation and Securities Fraud Enforcement Act of 1998 would repeal the state’s 1913 “merit review” law that gives the Department of Corporations a gatekeeper role in deciding which companies may make public stock offerings. Trial lawyers have opposed the bill, which was coauthored by Sen. Bruce McPherson (R-Santa Cruz). If SB 1205 fails today, the measure would be dead for this year. If it is approved, the bill goes to the Senate Appropriations Committee for consideration.