Chapter 14.5Awarding of Contracts

Section § 5970

Explanation

This section of the law defines key terms used in the chapter. It clarifies that a "person" refers to financial professionals like brokers and investment advisors. A "regulatory agency" includes both state and national financial and securities regulatory bodies. Lastly, "state or local government" encompasses various government entities and public bodies, from state departments to city boards.

As used in this chapter, the following phrases have the following meanings:
(a)CA Government Code § 5970(a) “Person” means any broker, dealer, municipal securities dealer, investment advisor, or investment firm.
(b)CA Government Code § 5970(b) “Regulatory agency” means the Department of Financial Protection and Innovation, the securities administrators or other similar regulatory authority in any other state, the Securities and Exchange Commission, the Financial Industry Regulatory Authority, the Municipal Securities Rulemaking Board, the Commodity Futures Trading Commission, or any other self-regulatory organization.
(c)CA Government Code § 5970(c) “State or local government” means the state, any department, agency, board, commission, or authority of the state, or any city, city and county, county, public district, public corporation, authority, agency, board, commission, or other public entity.
broker dealer investment advisor investment firm regulatory agency Department of Financial Protection and Innovation Securities and Exchange Commission Financial Industry Regulatory Authority Municipal Securities Rulemaking Board Commodity Futures Trading Commission self-regulatory organization state government local government public entity municipal securities dealer
(Amended by Stats. 2022, Ch. 452, Sec. 168. (SB 1498) Effective January 1, 2023.)

Section § 5971

Explanation

When the state or local governments in California choose someone to handle underwriting services for securities, they can look into that person's past actions. If the person or their employees have a history of fraud or breaking securities laws, this can influence the decision. This includes any previous legal actions like cease and desist orders, injunctions, or other enforcement orders from regulatory agencies.

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.
underwriting services financial advisory securities issuance fraud state securities law federal securities law cease and desist order preliminary injunction permanent injunction censure regulatory agency enforcement order local governmental entity prior conduct advisory services
(Added by Stats. 1996, Ch. 309, Sec. 1. Effective January 1, 1997.)