What Does a Securities Lawyer Do and Do I Need One?

Apr 15, 2019

If you have heard the terms “investment lawyer” or “securities attorney” but are not sure of what they mean, you are not alone.  The world of securities law is complex and can be confusing. With this article, we hope to explain what a securities or investment lawyer does and how a securities lawyer can help you.

In this article, we’ll address these questions:


What is Securities Law?

First, let’s go over some definitions. Security is a fungible financial instrument used to raise capital in public and private markets. Examples of securities include stocks, government bonds, corporate bonds, exchange-traded funds (ETFs) and certificates of deposit (CDs). If you have a 401(K) or another type of retirement account, you most likely own securities.

Securities law refers to federal and state statutes, regulations and judicial decisions that govern the offer, sale, issuance, registration, and marketing of securities. These laws protect investors and the securities industry by preventing financial fraud, market manipulation, and insider trading.

Federal and state agencies play a vital role in the securities industry.  The U.S. Securities and Exchange Commission (SEC) is a federal agency whose mission is to: “protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. The SEC strives to promote a market environment that is worthy of the public’s trust.”

Brokerage firms are regulated by the Financial Industry Regulatory Authority (FINRA), a not-for-profit organization authorized by Congress.  FINRA writes and enforces rules. It also registers broker-dealer firms and brokers, educates investors, and administers a dispute resolution forum for investors, brokerage firms, and brokers.

In addition to the SEC and FINRA, individual states have their own security regulators or security commissioners who are responsible for licensing firms and their agents, investigating violations of state securities law, and filing enforcement actions when appropriate.

What Does a Securities Lawyer Do?

The term securities lawyer generally refers to an attorney who specializes in the laws that govern the securities industry.  A securities lawyer may represent corporations with regard to securities filings, compliance, and transactions. Other securities lawyers, like the lawyers at the Costello Law Group, focus on representing individual investors who have been the victims of fraud or who have disputes with investment professionals.

These lawyers will investigate firms and financial advisors who have harmed their client and when appropriate, may file a lawsuit against the responsible parties in state or federal court or a complaint with FINRA or another alternative dispute resolution forum.


How Can You Benefit from Hiring a Securities Lawyer?

Many people think that only wealthy people need lawyers in their financial affairs.  That could not be further from the truth. Unfortunately, mistakes and fraud by investment professionals are all too common.  In 2018, FINRA expelled 16 firms and 386 financial advisors from the securities industry due to violations of security law.  This does not include the many other firms and individuals who are not barred from the industry but who were held liable for their client’s investment losses.

Ordinary individual investors, including civil servants, teachers, nurses, and retirees, may need a securities lawyer. In most cases, if they have lost money due to mistakes, incompetence, or fraud by an investment professional.  While FINRA, the SEC, and state securities regulators serve a vital role in protecting investors, they simply have too many individuals, firms, and market transactions to monitor to discovery every act of fraud or negligence. Individual investors should consult with a securities lawyer if they have lost money due to fraud or stockbroker misconduct.

If you have any questions about securities law or you wish to engage the services of a securities lawyer, you’ve come to the right place. The Costello Law Group specializes in stockbroker misconduct and investment fraud.  Protect your investment today – call the Costello Law Group.



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