(a)(1)A person who purchases a security from or sells a security to a broker-dealer that is required to be licensed and has not, at the time of the sale or purchase, applied for and secured from the commissioner a certificate under Part 3 (commencing with Section 25200), that is in effect at the time of the sale or purchase authorizing that broker-dealer to act in that capacity, may bring an action for rescission of the sale or purchase or, if the plaintiff or the defendant no longer owns the security, for damages.
(2)Upon rescission and tender of the security, a purchaser may recover the consideration paid for the security plus interest at the legal rate, less the amount of any income received on the security.
(3)Upon rescission and tender of the consideration paid for the security plus interest at the legal rate, a seller may recover the security plus the amount of any income received by the defendant on the security.
(4)Damages recoverable under this section by a purchaser shall be an amount equal to the difference between the following:
(A)The price at which the security was bought plus interest at the legal rate from the date of purchase.
(B)The value of the security at the time it was disposed of by the plaintiff plus the amount of any income received on the security by the plaintiff.
(5)Damages recoverable under this section by a seller shall be an amount equal to the difference between the following:
(A)The value of the security at the time of the filing of the complaint plus the amount of any income received by the defendant on the security.
(B)The price at which the security was sold plus interest at the legal rate from the date of sale.
(6)A tender of a security or of consideration paid for a security plus interest pursuant to this section may be made at any time before entry of judgment.
(b)The court, in its discretion, may award reasonable attorney’s fees and costs to a prevailing plaintiff under this section.
Notes of Decisions
Tamer Salameh v. Tarsadia Hotel, 726 F.3d 1124 (9th Cir. 2013).
“Plaintiffs’ second amended complaint alleges eight claims for relief: (1) misrepresentation and omission in violation of § 12(a)(2) of the Securities Act of 1933; (2) misrepresentation and omission in violation of § 10(b) of the Securities Exchange Act of 1934; (3) sale of an…”
Jackson v. Fischer, 931 F. Supp. 2d 1049 (N.D. Cal. 2013).
· cites it 2× “§ 25230 (against Fischer only); (7) declaratory judgment of breach of Investment Advisors Act of 1940 (against Fischer only); (8) negligent misrepresentation (against all individual defendants); (9) violation of Cal. Corp.Code § 25501.5 (against all defendants); (10) violation…”
Timboe v. Clark, No. 3:20-cv-08719, 2022 WL 991721 (N.D. Cal. Mar. 31, 2022).
· cites it 3× “California Corporations Code § 25501.5 2 Timboe’s Section 25501.”
Staniforth v. Total Wealth Mgmt., Inc., No. 3:14-cv-01899 (S.D. Cal. June 2, 2023).
· cites it 3× “16 To prevail on his tenth claim against Total Wealth and AC Management for 17 violations of California Corporations Code § 25501.5, Compl.”
Pamela Day v. Dustin Boyer, No. 2:19-cv-01669 (C.D. Cal. Jan. 21, 2020).
· cites it 2× “) Pursuant to California Corporations Code section 25501.”
Gary Abrams v. Blackburne & Sons Realty Capital Corp., No. 2:19-cv-06947 (C.D. Cal. Jan. 31, 2020).
“10b-5) (the “10b-5 claim’); (2) a state securities fraud claim against all defendants pursuant to California Corporations Code § 25501; (3) a state securities fraud claim against BSR pursuant to the broker-dealer requirements contained in California Corporations Code § 25501.”
Gary Abrams v. Blackburne & Sons Realty Capital Corp., No. 2:19-cv-06947 (C.D. Cal. Mar. 25, 2020).
“10b-5) (the “10b-5 claim’); (2) a state securities fraud claim against all defendants pursuant to California Corporations Code § 25501; (3) a state securities fraud claim against BSR pursuant to the broker-dealer requirements contained in California Corporations Code § 25501.”
Gary Abrams v. Blackburne & Sons Realty Capital Corp., No. 2:19-cv-06947 (C.D. Cal. July 1, 2021).
“10b-5, against BSR; (2) securities fraud pursuant to California Corporations Code § 25501, against all defendants: (3) securities fraud pursuant to California Corporations Code § 25501.”
Roberto Modero v. Norada Equity, Inc., No. 8:25-cv-00574 (C.D. Cal. Sept. 12, 2025).
“Code § 25501 ; (3) Sale by Unlicensed Broker-Dealer in Violation of Cal. Corp. Code § 25501.5 ; (4) Negligent Misrepresentation; (5) Breach of Fiduciary Duty; (6) Aiding and Abetting Under Cal.”
Kronk v. Landwin Grp., No. B244238 (Cal. Ct. App. Dec. 16, 2013).
“1 Corporations Code section 25501.5, subdivision (a), provides in part, “A person who purchases a security from or sells a security to a broker-dealer that is required to be licensed and has not, at the time of the sale or purchase, applied for and secured from the commissioner…”
Cal. Corporations Code § 25501.5(a)(1): 1 case
Jackson v. Fischer, 931 F. Supp. 2d 1049 (N.D. Cal. 2013).
“§ 25230 (against Fischer only); (7) declaratory judgment of breach of Investment Advisors Act of 1940 (against Fischer only); (8) negligent misrepresentation (against all individual defendants); (9) violation of Cal. Corp.Code § 25501.5 (against all defendants); (10) violation…”
Cal. Corporations Code § 25501.5(a)(2): 1 case
Staniforth v. Total Wealth Mgmt., Inc., No. 3:14-cv-01899 (S.D. Cal. June 2, 2023).
“16 To prevail on his tenth claim against Total Wealth and AC Management for 17 violations of California Corporations Code § 25501.5, Compl.”
Cal. Corporations Code § 25501.5(b): 1 case
Staniforth v. Total Wealth Mgmt., Inc., No. 3:14-cv-01899 (S.D. Cal. June 2, 2023).
“16 To prevail on his tenth claim against Total Wealth and AC Management for 17 violations of California Corporations Code § 25501.5, Compl.”
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