Sponsored by Mark J. Astarita, Esq. – representing brokers and investors in securities and employment disputes for over 30 years. Have a securities law question? Call his office today – 212-509-6544 or email him
Introductory Materials
Federal Securities Laws -introduction and overview of the cases and statutes that comprise the United States securities laws. Insider trading, stock manipulation, and more.
Blue Sky Laws (State Securities Laws) – introduction and overview of the securities laws of the various states, how they interact with the federal laws, plus links to all of the state securities administrators, statutes, and regulations.
Securities Arbitration Overview – The ultimate primer on securities arbitration, authored by Mark J. Astarita, Esq., a New York securities attorney who has represented parties to securities arbitrations in virtually every major city for 30 years. An excellent introduction to the process.
Look Inside an Arbitration Hearing – arbitrations are private, and the unknown is frequently a cause for concern. Exactly what happens at an arbitration hearing? An insider look by nationally recognized securities arbitration attorney Mark J. Astarita.
Initial Public Offering Process – going public is only one method of raising capital.
Private Placements – raising capital privately is often the preferred method for many companies, but the process must be carefully managed. With less registration requirements comes more regulation in order to maintain the registration exemption.
Insider Trading – there is legal insider trading and illegal insider trading. Both can be profitable, but the illegal version comes with significant penalties.
Recommended Books
Investing for Dummies– Don’t let the title fool you, this is an excellent introduction to investing. “Investing for your future is wise and essential. Of course, you want to make solid investment choices and minimize mistakes. This updated, best-selling guide educates you on investing concepts and lingo so you can make the best decisions in all economies and markets. Understanding how to find and make smart investments is a skill that can be learned, and this book by money-pro Eric Tyson will help you by discovering how to weigh risk vs. return, offering tips on choosing stocks and funds, getting started in real estate and small business, and so much more.”
Personal Finance For Dummies – From Amazon – “Personal Finance for Dummies offers sound and practical advice for those who want to get control over their personal financial lives. Author Eric Tyson points out the most common mistakes that we all make in our approach to money and prescribes ways to save and invest for a secure future. Using worksheets, the book helps you to measure your own financial health by looking at factors such as how much debt you carry, your savings rate, as well as investment and insurance checkups. The book looks at how you should invest your retirement account, approach taxes, and provides a good overview on how to buy real estate.”
Mutual Funds For Dummies, April 2016 edition – “With straightforward advice and a plethora of specific up-to-date fund recommendations, personal finance expert Eric Tyson helps you avoid fund-investing pitfalls and maximize your chances of success. This revised edition features expanded coverage of ETFs, fund alternatives, and research methods Tyson provides his time-tested investing advice, as well as updates to his fund recommendations and coverage of tax law, changes Sample fund portfolios and updated forms show you exactly how to accomplish your financial goals.”
Featured Articles
Introduction to the Federal Securities Laws -an introduction to the laws which govern the purchase and sale of securities in the United States, including the Securities Act of 1933 and the Securities Exchange Act of 1934
Introduction to the Blue Sky Laws (State Securities Laws) – each state has its own securities laws, rules and regulations. This article provides an overview of the function and purpose of those state laws, known as “blue sky laws.”
Introduction to Private Placements – hedge funds and private equity funds take in investors’ money through a private placement. Such offerings are exempt from the registration process for offering securities for sale, provided the rules are followed. A description of the exemption and the private placement process.
Recent Blog Posts
Enhancing Investor Education and Protection in World Investor Week 2023
Introduction The Securities and Exchange Commission (SEC) has announced its commitment to emphasizing the significance of investor education and protection during the World Investor Week (WIW) 2023, which is scheduled from October 2nd to October 8th. The ever-evolving landscape of technologies and digital tools has revolutionized the investment landscape, making it more accessible and efficient. However, ...
Hire a Securities Defense Attorney to Respond to an SEC Subpoena
Facing a subpoena can be a daunting experience for individuals and businesses involved in securities-related matters. The SEC wields substantial authority to investigate potential violations of securities laws, and responding to a subpoena demands a keen understanding of the legal process and regulations. However, I often see individuals who decide to respond by using a ...
Never Stop Learning: Protecting Your Investments and Future – SEC’s New Public Service Campaign
The SEC‘s Office of Investor Education launched a public service campaign for older investors to continuously educate themselves on protecting their finances.
Introduction A broker’s CRD number is a unique identifier FINRA assigns to each registered person and entity. It’s used to track their employment history, licensing, and disciplinary actions throughout their career in the financial industry. Understanding the importance of CRD numbers can help investors make informed decisions about who they work with and protect their financial ...
March 23, 2023 —The Securities and Exchange Commission has charged three individuals for selling interests in pre-IPO companies without registering as broker-dealers and misleading investors about associated fees. Scott Hollender, Gabriel Migliano, Jr., and Frank Vecchio were accused of actively soliciting investments for funds set up as series limited liability companies (LLCs) between November 2017 ...
What Does a Securities Lawyer Do?
Mark J. Astarita, Esq. is a nationally recognized securities attorney, representing clients in securities investigations, arbitrations and litigation matters across the country. You can contact him at 212-509-6544 or by email at mja@sallahlaw.com While securities law is itself a specialized field of law, there is more than one type of securities lawyer. There are transactional securities ...
Securities Arbitration Overview-2023 Update
Securities Arbitration is not like any other proceeding Background Arbitration is a dispute resolution process, which is an alternative to the traditional lawsuit in court. Rather than have a matter decided by a judge and jury, participants to an arbitration proceeding have their dispute resolved by an impartial panel of one or three arbitrators. Virtually every dispute ...
Investor Legal Information Center
Sponsored by Mark J. Astarita, Esq. – representing brokers and investors in securities and employment disputes for over 30 years. Have a securities law question? Call his office today – 212-509-6544 or email him Introductory Materials Federal Securities Laws -introduction and overview of the cases and statutes that comprise the United States securities laws. Insider trading, stock ...
Ozy Media and Executives Charged with Defrauding Investors of $50 Million
The Securities and Exchange Commission has charged media and entertainment company Ozy Media Inc. and its executives with defrauding investors of approximately $50 million through misrepresentations regarding the company’s financial condition, business relationships, and fundraising efforts. The CEO of Ozy Media, Carlos R. Watson, Jr., the former COO Samir Rao, and the former Chief of ...
Tips for a Successful Securities Mediation
Tips for a Successful Securities Mediation Securities arbitration is a proven method for resolving disputes in the securities industry. It is a quicker and more cost-effective alternative to traditional court proceedings. With increasing frequency, investors and advisors are turning to mediation to make the process even more effective. Mediation is a form of alternative dispute resolution that ...
Featured Articles
Customer Claims in Arbitration
I have been representing customers and brokers in securities arbitration matters since 1982. In those 35 years I have handled over 700 securities arbitration cases. Since securities arbitration is such a large part of my practice, I also survey all of the arbitration awards that are entered in matters across the country, write columns for investors and brokers on the topic, and stay well informed on developments in this unique area of law. Today, FINRA administers virtually all of the securities arbitration disputes in this country, with the AAA and JAMS handing the remainder. From my work, and my review of the statistical summaries published by FINRA it is clear that investment disputes fall into very well-defined categories. Naturally, the type of cases that are filed is a function of the market. Not only are there fewer arbitrations when the markets are doing well, economic factors create different types of claims. For example, when Internet stocks fell in April 2000, the arbitration forums saw a significant increase in arbitration filings, and the emergence of a new category of claim, for over-concentration, or failure to diversify. As the markets improved in 2003, through 2007, we saw a sharp decrease in the number of arbitration ...
Expungement of Customer Complaints
You can remove derogatory reports from your CRD Report. Call 212-509-6544 to discuss the process with a securities law attorney. The problems associated with FINRA‘s CRD Disclosure System are well known to visitors to SECLaw.com, as we have written about the issue a number of times. The concept of disclosing every allegation, justified or not, against a registered person, to anyone who cared to ask, is unheard of in our system of justice. The addition of BrokerCheck, where the information is available to anyone with an Internet connection has made the situation intolerable. For that reason, we are often asked to file an expungement request with FINRA, to remove unwarranted items from the CRD system The interests of investor protection overrode the concepts of fundamental fairness and due process for brokers, and today there is full disclosure of every wart, pimple and untrue allegation made against a broker. Not fair to the broker, but of a theoretical benefit to the investing public. Part of the problem are customer arbitrations. Customers can file an arbitration against a broker for anything, at virtually no cost to the customer. They can say anything they want, it doesn’t cost them anything, and there is no penalty for ...
Insider Trading – The Legal and Illegal
Insider trading laws have a significant impact on the stock market and the conduct of investors. I have been representing investors and financial professionals in insider trading investigations and proceedings for over 30 years. It all started in the late 1980s when my then-partner and I represented a financial printer in an investigation that lasted for years and ended in a three-week SEC federal court proceeding. Since then, my current partners and I have represented registered representatives and investors from all walks of life in dozens of investigations and enforcement proceedings. We have won a few, but our best work is when we are able to avoid an enforcement proceeding from even starting. The insider trading laws and court decisions have changed dramatically over the decades, with the SEC and the courts expanding the scope of the theory of insider trading beyond all reasonable bounds. However, it is this concept that we need to deal with, and we have had a great deal of success in defending potential defendants – because the investigation gets closed before a case is filed. Illegal insider trading is a serious securities law violation that carries potential civil and criminal penalties. Civilly, the penalties can be as large ...
Mark Astarita, Esq. is a nationally recognized securities attorney who represents investors, financial professionals, issuers and financial firms in a wide variety of matters involving federal and state securities laws. He can be reached at mja@sallahlaw.com. The state securities laws and the regulatory scheme has not changed much since 2001 when I published the first version of this Blue Sky Law introduction. While the SEC directly, and through its oversight of the FINRA and the various Exchanges, is the main enforcer of the nation’s securities laws, each individual state has its own securities laws and rules. These state rules are known as “Blue Sky Laws”. What Are Blue Sky Laws? Blue sky laws are state regulations established as safeguards for investors against securities fraud. The laws, which may vary by state, typically require sellers of new issues to register their offerings and provide financial details of the deal and the entities involved. As a result, investors have a wealth of verifiable information on which to base their judgment and investment decisions. Why “Blue Sky” laws The origin of the term is a bit unclear, but the first use of the term that we are aware of is in an opinion of Justice McKenna of the United States ...
Federal Securities Law, a Securities Lawyer Guide
The SEC, FINRA, the States, and much more Introduction The history of securities regulation and federal securities law is well beyond the scope of this work, and the reader is commended to any one of a number of books in the area. One of the best-known, and often cited treatises on the topic is Loss and Seligman, Securities Regulation, a multi-volume treatise on the subject, published by Little Brown & Co in New York City. A single-volume version is also available and can be ordered online. For purposes of this article, it is sufficient to note that the federal securities laws are in reality a myriad of rules and regulations of 55 different regulatory agencies, including the Securities Commission in each of the fifty States, the District of Columbia, Puerto Rico and Guam, as well as the Securities and Exchange Commission, the Financial Industry Regulatory Authority, and any of the regional exchanges of which he or his firm is a member. The complex regulatory landscape governing the securities industry can be likened to a convoluted maze of similar and sometimes overlapping regulations. In practice, this intricate web of rules and agencies can be daunting to navigate, leading to a level of regulatory oversight that might seem overwhelming. This multifaceted system, consisting ...
Understand What is a Security?
A security is a form of ownership in an entity. While some believe that in order to be a security the instrument must be traded on a market, the legal definition of a security is much broader. The definition is important, because if the instrument is a security, then the federal and state securities laws apply to the purchase and sale of that instrument. We define and explain the different types of securities
Finders Explained – Be Careful
A question I am often asked is what is the definition of a finder, or questions that lead to that question. The issue arises when an unregistered person or entity introduces investors to an issuer and seeks to obtain payment based on the investment made by the investor. The problem is, that in many instances, the introducing party is acting in a manner that requires registration as a broker or a dealer, and thus must be registered in order to accept compensation for the introduction to the investor. The issues of finders and compensation are currently a “hot” topic for securities regulators, and the issue is in great flux today. It is, therefore difficult to describe finders in a general way that is helpful because the answer in a particular case will turn on the particular facts. One small factual change, and the answer changes. General Definition of a Finder Addressing the issue GENERALLY, he does not have to register if the finder is only a finder. Being a finder means that he only introduces; he does not discuss, negotiate, or get involved in the transaction. However, the SEC may take a different view of “discuss” or “get involved” than you do. Statutes and ...
Compliance with securities regulations is only the beginning By Mark J. Astarita, Esq. Introduction Cold calling is a method of marketing a service or product by calling prospective clients “cold” – that is, without an introduction, to determine if the potential client has a need for, or interest in, the caller’s product. Cold calling has a long history in the brokerage community, and while having a poor reputation, is a legitimate and valuable marketing tool for brokerage firms, and provides a legitimate source of information for customers, provided the tool is not abused. However, there have been abuses, inside and outside the brokerage industry, of the cold calling procedure. Most of the complaints regarding the procedure have arisen outside the industry, and relate to the time of day that the calls are made, the use of automated dialers and similar technological “advances” in the telecommunications industry, as well as outright fraud. While these complaints have focused on non-brokerage industry firms and practices, the regulations regarding same effect the brokerage industry. The Basic Regulations and Rules In accordance with the Telephone Consumer Protection Act of 1991, the Federal Communications Commission (FCC) issued a cold-calling rule. The rule establishes procedures to eliminate unwanted telephone solicitations to residences ...
Churning claims dominated the securities arbitration landscape in the 2000’s, but have declined over the years, as the trading mania waned. As the markets improved, we have begun to see a resurgence of churning claims again. The common perception among the general public is that a customer who trades his or her account on a regular basis is a broker’s dream. While the commissions generated by such activity might very well enhance a broker’s payout, the activity could very easily turn into a broker’s nightmare if not carefully monitored. Churning Churning is excessive trading in a customer’s account by a broker taken in the context of the customer’s financial situation and investment objectives. While no one test is available to determine if an account has been churned, churning requires three elements, first, excessive trading, and second, control of the account by the Registered Representative, and three, intent to defraud the customer. The intent element is difficult to prove, but will typically be proven by establishment of the first two elements. The problem with customers who trade heavily with a retail broker is that the broker may later be subjected to a claim for churning, if the trading does not turn out to be profitable. ...
By Mark Astarita Being the subject, target, or even a witness in an SEC or a FINRA investigation is not a pleasant experience. As I discussed in my column “When the SEC Comes Calling” a financial professional’s involvement in a regulatory investigation or proceeding is extremely serious, and can be a career busting event. Receiving a Wells Notice could be worse. Interested readers should also read Tips for Responding to an SEC Subpoena. Be Prepared While careful preparation and use of experienced counsel is the key to a successful outcome, prospective defendants (who are called respondents in these types of proceedings) have a valuable tool in their arsenal when dealing with the regulators – the Wells Submission. My partners and I have been involved in hundreds of investigations with FINRA and the SEC. While we are often able to head off an investigation before we reach the Wells Notice stage, we have made countless wells submissions. If you have an SEC or an 8210 Request from FINRA, call us before you respond. We may be able to save you time, and your license. Wells Notice The process starts with a Wells Notice – a notification from a regulator that it intends to recommend that enforcement ...
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Past Articles and Commentary
Every month The Securities Law Home Page brings together commentary and updates from securities law practitioners and regulators. Past articles are collected here in chronological order, or simply search for the topic you are interested in.
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Sallah Astarita & Cox, LLC - Securities Litigation Attorneys - former SEC Staff Attorneys and Brokerage Firm Counsel representing issuers, advisors and investors nationwide in securities investigations, disputes, and arbitrations. Call 212-509-6544.
Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.
He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page - SECLaw.com, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.