California Codes

Cal. Corporations Code § 25400 (2026)

✓ current as of May 2026
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It is unlawful for any person, directly or indirectly, in this state:

(a)For the purpose of creating a false or misleading appearance of active trading in any security or a false or misleading appearance with respect to the market for any security, (1) to effect any transaction in a security which involves no change in the beneficial ownership thereof, or (2) to enter an order or orders for the purchase of any security with the knowledge that an order or orders of substantially the same size, at substantially the same time and at substantially the same price, for the sale of any such security, has been or will be entered by or for the same or different parties, or (3) to enter an order or orders for the sale of any security with the knowledge that an order or orders of substantially the same size, at substantially the same time and at substantially the same price, for the purchase of any such security, has been or will be entered by or for the same or different parties.

(b)To effect, alone or with one or more other persons, a series of transactions in any security creating actual or apparent active trading in such security or raising or depressing the price of such security, for the purpose of inducing the purchase or sale of such security by others.

(c)If such person is a broker-dealer or other person selling or offering for sale or purchasing or offering to purchase the security, to induce the purchase or sale of any security by the circulation or dissemination of information to the effect that the price of any such security will or is likely to rise or fall because of market operations of any one or more persons conducted for the purpose of raising or depressing the price of such security.

(d)If such person is a broker-dealer or other person selling or offering for sale or purchasing or offering to purchase the security, to make, for the purpose of inducing the purchase or sale of such security by others, any statement which was, at the time and in the light of the circumstances under which it was made, false or misleading with respect to any material fact, or which omitted to state any material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, and which he knew or had reasonable ground to believe was so false or misleading.

(e)For a consideration, received directly or indirectly from a broker-dealer or other person selling or offering for sale or purchasing or offering to purchase the security, to induce the purchase or sale of any security by the circulation or dissemination of information to the effect that the price of such security will or is likely to rise or fall because of the market operations of any one or more persons conducted for the purpose of raising or depressing the price of such security.

Notes of Decisions
Cited in 52 cases (13 in the last 5 years), 1976–2025 · leading case: Irving Firemen's Relief Fund v. Uber Tech., Inc., 998 F.3d 397 (9th Cir. 2021).
Irving Firemen's Relief Fund v. Uber Tech., Inc., 998 F.3d 397 (9th Cir. 2021). · cites it 6× “Because we hold that Irving fails to state a claim under the pleading requirements of Rule 8(a) and Rule 9(b), we need not and do not address whether the heightened pleading standards of the PSLRA apply to a claim of violation of California Corporations Code sections 25400 and…”
Goodman v. Kennedy, 556 P.2d 737 (Cal. 1976). · cites it 4× “*340 Plaintiffs also assert causes of action for fraud and for violation of provisions of the Corporate Securities Law of 1968 (Corp. Code, § 25400, subd. (d), § 25401) based on the same alleged nondisclosures.”
Louisiana Pac. Corp. v. Money Mkt. 1 Institutional Inv. Dealer, 851 F. Supp. 2d 512 (S.D.N.Y. 2012). · cites it 6× “California Securities Laws Plaintiff alleges violations of California Corporations Code sections 25400, 25401, and 25504.”
In Re Activision Sec. Litig., 621 F. Supp. 415 (N.D. Cal. 1985). · cites it 5× “§§ 78j(b) and 78t(a) and Rule 10b-5 promulgated thereunder; Cal. Corp.Code §§ 25400 and 25401; and common law claims of fraud, deceit, and negligent misrepresentation.”
Overstock.com, Inc. v. Gradient Analytics, Inc., 61 Cal. Rptr. 3d 29 (Cal. Ct. App. 2007). · cites it 2× “Claim for Violation of Corporations Code Section 25400 Respondents Barron and Helbum, former owners of Overstock common stock, alleged that Rocker appellants engaged in concerted wrongful actions designed to wrongfully depress the price of Overstock’s common stock for their…”
Diamond Multimedia Sys., Inc. v. Superior Court, 968 P.2d 539 (Cal. 1999). · cites it 2× “Corporations Code section 25400, a part of the Corporate Securities Law of 1968 (Corp.”
Bowden v. Robinson, 67 Cal. App. 3d 705 (Cal. Ct. App. 1977). · cites it 3× “75, 98 [hereinafter Olson]; Corp. Code, §§ 25400, 25401, 25402.) Respondents assert that these fraud provisions when viewed in light of the sections requiring qualification and providing remedies and limitations thereto, indicate the Legislature’s intent to repudiate the common…”
California Amplifier, Inc. v. RLI Ins. Co., 2001 Cal. Daily Op. Serv. 10101 (Cal. Ct. App. 2001). · cites it 2× “) While section 25400, subdivision (d) “requires only that the defendant know or have reasonable ground to believe that the statement is false or misleading, this prohibition in itself is not a sufficient basis to establish civil liability without also complying with the…”
Kamen v. Lindly, 2001 Cal. Daily Op. Serv. 10187 (Cal. Ct. App. 2001). · cites it 2× “) Seller or Purchaser Requirement “Corporations Code section 25400, a part of the Corporate Securities Law of 1968 (Corp.”
Nuveen Mun. High Income Opportunity Fund v. City of Alameda, 730 F.3d 1111 (9th Cir. 2013). “Cal. Corp. Code §§ 25400 , 25500. The law defines “person” to include “a government, or a political subdivision of a government.”
Mirkin v. Wasserman, 858 P.2d 568 (Cal. 1993). “” (Corp. Code, § 25400.) “Any person who willfully participates in any act or transaction in violation of Section 25400 shall be liable to any other person who purchases or sells any security at a price which was affected by such act or transaction for the damages sustained by…”
Stichting Pensioenfonds ABP v. Countrywide Fin. Corp., 802 F. Supp. 2d 1125 (C.D. Cal. 2011). “Plaintiff’s Negligence and Cal. Corp Code §§ 25400 and 25500 et. Seq.”
— Cal. Corporations Code § 25400(d) — 9 cases
Irving Firemen's Relief Fund v. Uber Tech., Inc., 998 F.3d 397 (9th Cir. 2021). “Because we hold that Irving fails to state a claim under the pleading requirements of Rule 8(a) and Rule 9(b), we need not and do not address whether the heightened pleading standards of the PSLRA apply to a claim of violation of California Corporations Code sections 25400 and…”
Vallejo Sanitation & Flood Control Dist. v. Fuld, 903 F. Supp. 2d 152 (S.D.N.Y. 2012).
Louisiana Pac. Corp. v. Money Mkt. 1 Institutional Inv. Dealer, 851 F. Supp. 2d 512 (S.D.N.Y. 2012). “California Securities Laws Plaintiff alleges violations of California Corporations Code sections 25400, 25401, and 25504.”
Am. High-Income Trust v. Alliedsignal, 329 F. Supp. 2d 534 (S.D.N.Y. 2004).
Allyn v. Wortman, 725 So. 2d 94 (Miss. 1998).
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