What are Securities?Securities are stocks, bonds and mutual funds. These investments are purchased by individuals attempting to make a profit. Stocks are purchased in a corporation and give people part ownership of the company. The complexity of this area of law is governed by various federal and state regulations that oversee the conduct of investors. What are Some Common Forms of Abuses?The most common form of abuse today is insider trading. This occurs when a person with detailed information about a company uses the information to purchase or sell stocks. Insider trading usually occurs with brokers, company employees, stock analysts, etc. Furthermore, poor accounting practices are becoming another common form of abuse. This occurs when a company understates its losses or exaggerates its profits. What are Some Remedies Regarding Securities Fraud?Investors have a variety of options if they wish to receive compensation or punish companies/individuals that engage in securities fraud. These include: - Notify law enforcement - The Justice Department has a long and distinguished history of prosecuting federal securities crimes
- Begin a class action lawsuit - When many investors are injured by a company¿s abuse of insider trading or poor accounting practices the injured investors can start a class action lawsuit
- Contact the Securities and Exchange Commission (SEC)
What Steps Can I Take to Protect My Investments?
There are a variety of steps an investor can undertake. These include: - Be sure your brokerage firm is licensed
- Check the Central Registration Depository (CRD) - the CRD contains information about brokers and licensing
- Stay in contact with your broker
Should I Contact an Attorney?The law regarding securities is far too complex to understand without an experienced attorney to help guide you through the process. If you have lost significant amounts of money it may be a good idea to contact an attorney and explain your situation. Furthermore, a statute of limitation bars restitution after a certain time period. If you believe you may have a case, contact a lawyer immediately. |
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