Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a)
For purposes of this section:
(1) A
proceeding involving a licensee or a subsidiary of a licensee shall not be
deemed to be material:
(A) If the proceeding
is ordinary routine litigation incidental to the business of the licensee or of
the subsidiary; or
(B) If the
proceeding involves primarily a claim for damages and if the amount of damages
claimed (excluding interest and costs) against the licensee or the subsidiary
does not exceed 10 percent of the current assets of the licensee and its
subsidiaries on a consolidated basis. For purposes of computing the amount of
damages claimed, in case a proceeding presents in large degree the same issues
as other proceedings pending or known to be contemplated, the amount of damages
claimed in such proceeding shall be deemed to include the amount of damages
claimed in such other proceedings.
(2) Notwithstanding the provisions of
Paragraph (1) of this Subdivision (a), each of the following proceedings shall
be deemed to be material:
(A) Any material
proceeding in which any affiliate of the licensee or any person who is, or who
is an associate of, any (i) director, (ii) executive officer, or (iii) five
percent voting security owner of the licensee, is a party adverse to, or has a
material interest adverse to, the licensee or any subsidiary of the
licensee.
(B) Any bankruptcy,
receivership, or similar proceeding.
(b) In case a licensee is not a reporting
company, whenever any material proceeding to which such licensee or any
subsidiary of the licensee is a party or of which any property of the licensee
or of any subsidiary of the licensee is the subject, is commenced by or before
any court or governmental agency, the licensee shall, within 10 business days,
file with the Commissioner a report describing such proceeding, including:
(1) Title of the proceeding.
(2) Name and address of the court or of the
governmental agency before which the proceeding was commenced.
(3) Names of the principal parties to the
proceeding.
(4) Date the proceeding
was commenced.
(5) Description of
the factual basis alleged to underlie the proceeding.
(6) Relief sought in the
proceeding.
(c) Whenever
a licensee or any subsidiary of a licensee becomes the subject of any of the
following proceedings by or before any court or governmental agency, such
licensee shall within 10 business days, file with the Commissioner a report
describing such proceeding, including the information called for in Paragraphs
(1) to (6), inclusive, of Subdivision (b) of this Section.
(1) Proceeding to revoke or suspend a license
or other authorization or qualification of the licensee or subsidiary to
transact the business of issuing or selling payment instruments, the business
of issuing or selling travelers checks, the business of banking, or the
business of a bank holding company.
(2) Proceeding to prohibit, temporarily or
permanently, the licensee or subsidiary from transacting any business of the
kind referred to in Paragraph (1) of this Subdivision (c) or from engaging in
any conduct or practice with respect to any such business.
(3) Proceeding to impose any monetary or
other penalty upon the licensee or subsidiary for having violated any law
relating to any business of the kind referred to in Paragraph (1) of this
Subdivision (c).
(d)
Whenever any proceeding of the type referred to in Subdivision (b) or (c)of
this Section is concluded, the licensee shall, within 10 business days, file
with the Commissioner a report identifying the proceeding and describing the
conclusion of the proceeding.
1. Change
without regulatory effect amending section filed 8-19-97 pursuant to section
100, title 1, California Code of
Regulations (Register 97, No. 34).
Note: Authority cited: Section
33202,
Financial Code. Reference: Sections
33221 and
33902,
Financial Code.
