June 16, 2024
    The Legal Responsibilities of Securities Lawyers

    The Legal Responsibilities of Securities Lawyers: A Comprehensive Overview

    A securities lawyer can help business owners and individuals understand how complex federal and state securities laws apply to them. They can also assist with financing transactions and spot fraud.

    From the New York Stock Exchange to the Wild West-like world of penny stocks on the over-the-counter pink sheets, securities lawyers work at the heart of capital markets big and small. They also fight for investor rights and handle regulatory enforcement actions when corporations run afoul of SEC regulations.


    As the title suggests, securities lawyers often practice litigation. This is an area of the law where attorneys defend investors from brokerage firms and financial industry fraud. For this reason, securities lawyers are essential members of the investment community. If you believe you have been a victim of broker negligence or misconduct, contact an experienced securities lawyer today to learn more about your options. In addition, securities lawyers represent clients involved in arbitration under the Financial Industry Regulatory Authority.

    This aspect of the practice is essential to help ensure that markets are fair and honest. For example, when a public company issues an initial public offering (IPO), it must disclose all relevant information about its business to potential investors before the stock can be traded.

    Attorneys specializing in this area of the law enable companies to meet the requirements of federal securities laws, which include filing disclosure statements and annual, quarterly, and current reports with the SEC.

    Securities lawyers also assist with other day-to-day legal activities involving SEC compliance and corporate finance. They may draft and file registration statements, proxy statements, amendments to existing securities offerings, and other documents necessary to maintain SEC compliance. Securities attorneys also work on transactions that involve public and private companies, such as mergers and acquisitions. At Kurta Law, we specialize in representing investors and have successfully won substantial verdicts and settlements for our clients.

    Regulatory Compliance

    The most visible and high-profile aspect of securities lawyers’ jobs is their role in regulating the investment world. Whether investigating insider trading at a public company or defending financial professionals and individual investors against fraud allegations, securities attorneys are at the center of everything from stock exchanges to shady shenanigans in the corporate world that can cause billion-dollar losses for innocent shareholders.

    Securities law is highly regulated, and a skilled securities lawyer can help a new company or seasoned investor comply with federal and state regulations most effectively. For example, when a company plans to offer shares in the public market, it must prepare a disclosure statement and submit it to the SEC for approval. This can be lengthy, and the slightest oversight could lead to costly penalties.

    A securities attorney can also guide companies through day-to-day SEC filings, including annual and quarterly reports. In addition, a securities attorney can be invaluable in complicated deals like initial public offerings and mergers and acquisitions.

    Corporate Finance

    Securities lawyers help their clients comply with complex federal laws and regulations. For example, if a company wants to raise capital by issuing shares or debt, they need an experienced lawyer to complete the necessary paperwork and guide them through the process. This specialized area of law is often a good fit for people with a business background or an interest in financial matters.

    A securities lawyer can also guide on maximizing shareholder value, which involves balancing risk and return. They can help companies identify growth opportunities and determine whether they are financially feasible. They may also help a company develop and implement an effective cash management system.

    If a company runs afoul of securities regulations, it can face severe penalties and civil or criminal prosecution. Securities litigators then become central to the case, investigating the violations and filing suit. They can be employed by the SEC or private firms specializing in this area of law.

    The financial world is full of risks, and balancing the need for liquidity with profitability can be difficult. Corporate finance is responsible for determining the best mix of debt and equity, identifying financing sources, and establishing an appropriate level of profitability.

    The best way to prepare for a career as a securities attorney is to take a finance class in college and gain experience during your 1L summer at an investment bank, brokerage firm, or stock exchange.

    Client Counseling

    Securities lawyers must also understand and respect their clients’ values and belief systems. They must understand how their clients’ situation outside the legal case affects their approach. For example, a client may be able to negotiate a settlement with a financial institution or other investor group to avoid the high cost of a shareholder class action suit that could ultimately bankrupt the company in which they invest.

    A skilled securities attorney can prove invaluable to companies seeking to raise funds through an initial public offering or to expand their business by acquiring or merging with other companies. These deals often involve extensive securities law compliance, including meeting SEC requirements and state “blue sky” laws requiring the registration of new offerings.

    Securities attorneys can help individual investors and investment professionals as well. For example, suppose you have lost money with your brokerage firm or stock broker due to mismanagement or fraud. In that case, your lawyer can evaluate whether you have grounds to sue for negligence and violation of Federal Securities laws.

    Most brokerage firms require that any dispute be resolved through FINRA arbitration rather than a civil court suit, so your lawyer can also help you understand your rights in this type of scenario. In addition, securities attorneys can advise about investing in certain types of stock or other investments and ensure you are not violating Federal Securities laws.


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