What is Securities Law?

Mark J. Astarita is a nationally recognized securities lawyer who represents financial professionals and their firms in securities investigations, arbitrations, and litigation across the country. If you have a question relating to the securities laws, contact him at mja@sallahlaw.com or 212-509-6544.

Securities law refers to the body of law that relates to the financial markets. That includes the oversight of stock brokers and investment advisers, the stock exchanges themselves, the brokerage firms, the sale of securities, mergers, acquisitions, and much more. In short, if it in any way involves an investment of money, it falls under the category of securities law.

There are two primary sets of federal securities laws that come into play when a company wants to offer and sell its securities:

• Securities Act of 1933 (“Securities Act”)
• Securities Exchange Act of 1934 (“Exchange Act”)

Securities Act

The Securities Act regulates the offers and sales of securities in the United States. Unless an offering qualifies for an exemption from registration, the Securities Act requires the company to file a registration statement containing information about itself, the securities it is offering, and the offering. While registration statements are selectively reviewed by SEC staff, the SEC does not evaluate the merits of securities offerings or determine whether the securities offered are “good” investments or appropriate for a particular type of investor. A registration statement must be declared “effective” before it can be used to complete sales to investors. We describe this process in more detail under “Going Public.”

The Securities Act provides various exemptions that – when the specified conditions of those exemptions are met – permit offers and sales of securities to occur without SEC registration. We describe these “exemptions” from the registration requirements under “Exempt Offerings.”

Exchange Act

The Exchange Act requires companies that have an effective registration statement or meet certain thresholds to report information regularly about their business operations, financial condition, and management. These companies must file periodic reports or other information with the SEC. In some cases, the company must deliver the information directly to investors. We discuss these obligations under “Going Public.”

Securities Law Home Page

SECLaw.com has been providing information to the Internet community regarding the US securities laws since 1995. Our site has developed and expanded over the years, and we have organized the information in a couple of ways.

First, we have six information centers, one for each of the main areas of the site as follows:

Arbitration – SECLaw.com started in 1995 as primarily a site focusing on securities arbitration and regulation, as that was the focus of our founder, Mark Astarita‘s, legal practice. Today the arbitration section of the site pulls together commentary, statutes, rules, and news relating to the arbitration of securities disputes.

Brokers – there is clearly some overlap in our information centers, but the Brokers section contains links, commentary, and information of interest to all registered persons – brokers, advisers, compliance officers, and sales assistants – anyone involved in the sale of securities to the public.

Investors – here we pull together information of interest to investors

Corporate Finance – a large part of our site is the corporate finance section – the area of securities law that deals with raising money from investors and the rules and regulations that govern that process.

Law/Compliance – here we pull together legal briefs, and links to the securities law rules and regulations, from the federal and state regulators.

Funds – mutual funds, exchange-traded funds, and all of their variations are addressed here.

Securities Law Primers

You will find that our commentary and articles while written by lawyers are written for non-lawyers so that to the extent possible, we avoid legal jargon.

Some of our more popular introductory articles are as follows:

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)– in addition to the federal securities laws, each state has its own securities laws, rules, and regulations. This article provides an overview to the function and purpose of those state laws, known as “blue sky laws.”

Introduction to Securities Arbitration From securities attorney Mark Astarita, this overview of the securities arbitration process has been downloaded tens of thousands of times and has been recently updated. Today, nearly all disputes between customers and firms, and between brokerage firms, are resolved in binding arbitration.

Introduction to the Initial Public Offering Process – any offer to sell securities must be registered with the federal and/or state securities regulators, or exempt from registration. A description of the law, and the registration process.

Introduction to Private Placements – stock offerings that are not made to the general public are called private placements, and are exempt from registration with the securities regulators. A description of the exemption, and the private placement process.

Conclusion

Our site is big – after all, it covers a big topic and has been online for over 20 years. Browse around, use the search engine links to find what you want, and if you can’t find it, send us an email at webmaster@seclaw.com