What Does a Securities Lawyer Do?


With the recent financial scandals that have been in the headlines, more people are taking an interest in securities law. With cases like Enron, MF Global, and other companies where deceptive financial practices have robbed investors and pensioners of their money, the interest in securities laws has been on an upswing.

The Definition of Securities Laws

These are laws, rules, and regulations that govern financial aspects such as mutual funds, bonds, and stocks. The laws are designed to provide transparency while preventing criminal actions such as insider trading, market manipulation, and fraud. The system of laws is rather complex, particularly in their enforcement as there are many factors involved.

The Security and Exchange Commission (SEC) governs publically traded companies and accepts regular reports from them to ensure their compliance. The reports cite a company’s financial state which includes their expenditures, compensation to their executives, and other related material. Those who are invested in the company or brokers trading stocks will review the information to make their decisions. The law prevents insider information from being used to manipulate the market or for personal gain.

Why Hire a Securities Lawyer?

There are a number of reasons why you should have an attorney skilled in securities law representing your interests. The lawyer can help you plan for your investing by researching the financial condition of a particular company and provide the following information.

  • Make informed recommendations is suitable for you
  • Disclose all pertinent information about investments
  • Fiduciary Duty: Placing your financial interests first

Plus, an attorney skilled in securities law can point out potential signs of fraud or mismanagement of your portfolio when it comes to your investments. They can also point out potential claims available if you suffer losses on the market that may be due to forces that go beyond the legal aspects of trading which includes, but is not limited to the following.

  • Conflict of interest or failure to deliver on fiduciary responsibilities
  • Failure to supervise or diversify portfolio
  • Malpractice, ineptitude, or manipulation of the market
  • Using insider information or churning which is excessive trading to increase fees
  • Risky investing, not revealing pertinent facts, misrepresentation, and omitting facts

Also, trading without your permission or having unsuitable investments may also be grounds for a lawsuit. It is this type of litigation where a securities lawyer represents your interests in court either as the plaintiff or as the defendant if you are being sued. For the plaintiff, filing a lawsuit against your broker can be difficult given the number of arbitration clauses. However, to have a securities lawyer by your side means getting the best in legal advice so that you can take the right action. Plus, the lawyer can review all agreements between you and your broker before you sign any contract.