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Securities Law FAQ

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Securities Law FAQ

Securities laws include federal regulations and laws that oversee the purchase, sale, and creation of security interests, such as bonds, stocks, and debentures.

How Do State Securities Laws Differ from Federal Laws?

State securities laws, or “blue sky” laws, prohibit fraud against the:

  • Sale of securities
  • Registration requirements for securities to be sold in the state
  • Registration requirements for dealers and brokers

What Is Securities Fraud?

Securities fraud happens when a business or person attempts to unlawfully manipulate the investment market. Corporations, private investors, brokers, financial advisors, dealers, analysts can illegally attempt to manipulate the market.

How Does Corporation Fraud Differ from Securities Fraud?

Corporation fraud occurs when a company deliberately changes or conceals information to it appears to be successful. It can involve a few people or a lot depending on the extent of the fraud.

What Is a Security Violation?

A securities violation occurs when one party uses misrepresentation, false statements, or fraud to sale securities. Types of securities violations include:

  • Insider trading
  • Churning
  • Malpractice
  • Ineptitude
  • Market manipulation
  • Breach of fiduciary duty
  • Unauthorized trading

What Is Securities Class Action Lawsuits?

A securities class action lawsuit is a lawsuit that is brought on behalf of the investors who lost money due to a securities law violation. For example, a company makes misleading or false statements about its stock to potential investors to get them to buy stock at a higher price. However, the company was not as financially stable as it claimed. The investors who purchased stock would be able to bring a class action lawsuit against the company for a securities law violation.

A class action lawsuit benefits a small investor who does not have the money to hire a lawyer and bring a case against the company by themselves.

Should I Contact an Attorney about Securities Laws?

Securities law is a complex area of law that is difficult to navigate on your own. A business attorney can inform you of your rights and help you recover lost money.

Photo of page author Taelonnda Sewell

, LegalMatch Legal Writer

Last Modified: 11-05-2015 04:49 PM PST

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