What Is Securities Law?

People and companies make investments to support themselves. Securities law and related legal issues can be very complicated. If you own a company, you may have legal documents to be drafted or reviewed by an experienced attorney familiar with mergers and sec filings. Perhaps you need legal advice about an initial public offering of stock for a company you would like to invest in. No matter what your reason, having an experienced securities attorney will be helpful.

Definition of Securities Law

A security can be a stock (part ownership of a company), a bond (an “IOU" from a company to an individual), or an option (the right to buy something in the future at a specific price). Corporations, governments, and individuals buy and sell securities to grow their money.

The federal government has federal securities laws requiring companies who sell securities to provide truthful reports on their assets, liabilities, and accountings. It also has laws preventing securities buyers from “gaming the system" by using secret information to buy or sell stock. 

In addition, there are laws about what stockbrokers may do on behalf of their clients. The Financial Industry Regulatory Authority (FINRA)  oversees brokers and brokerage firms with rules to prevent misrepresentation to clients.

This area is also governed by laws such as the Securities Act of 1933. This Act requires companies to register with the government and provide information to potential investors. This is to help prevent securities fraud.

Securities lawyers are not only found in New York but also places like Atlanta or Miami. They work as general counsel for corporations, which allows them to help corporations follow securities laws, assist with initial public offerings (IPO) of stock, and act as legal counsel for legal affairs. They may also work as litigators to enforce securities laws and make sure people in the industry are following the rules. 

The Securities and Exchange Commission (SEC) employs attorneys to make sure companies and traders are following the rules with security offerings and other matters.

Securities attorneys also work with people who have experienced personal investment losses because of fraud or misrepresentation. These attorneys have years of experience in securities arbitration before FINRA arbitration panels. These panels are the way most legal issues between investors and brokerage firms are resolved.

If you want to learn more about this area of law, check out FindLaw's Securities Law Basics section.

Related Practice Areas

• Civil Litigation: Much of securities law enforcement takes place in civil court
• White-Collar Crime: Many white-collar crimes involve securities law violations
• Consumer Protection: Securities law exists to protect everyday consumers of the banking system
• Retirement Planning: People rely on investments to ensure their financial well-being into retirement

Have a Securities Legal Matter? Speak With an Attorney

If you are starting your own company or think your broker has committed fraud, you should speak to an attorney. You can get a referral from your local bar association or find a securities attorney near you. They can provide whatever legal representation you require.