The securities industry is heavily regulated, and brokers and financial advisors must uphold specific duties. When they do not, investors can suffer from financial devastation.
A knowledgeable New York securities lawyer can help investors recoup lost assets. These professionals can also aid companies seeking to increase funding. Their practice can involve either litigation or arbitration.
Legal Issues
Securities belong to a highly specialized area of law. A lawyer who practices securities law spends considerable time learning about how the rules change, which organizations govern the industry, and what kinds of situations can arise. The legal issues are complex and constantly evolving, so securities lawyers must keep up with the latest developments.
Securities lawyers often work with companies trying to raise capital and ensure that they comply with regulatory requirements. They might also assist private clients seeking advice on investing their money. The role of a securities attorney can also include advising investors on what kind of risk they might be taking when making certain investments, as well as helping individuals file arbitration claims with their brokers or financial advisors if they’ve suffered losses due to misconduct.
A lawyer who accepts client securities instead of a cash fee may face unique ethical challenges. In such situations, the lawyer must comply with DR 5-104, which states that “a lawyer should not accept employment if there is a reasonable probability that the exercise of the lawyer’s professional judgment will be adversely affected by his or her own financial, business, property or personal interests unless such interest can be adequately disclosed to and consented to by the client.” The Committee notes that this concern is particularly acute in cases where most fees payable are securities with an active market value.
Regulation
Securities lawyers are heavily involved in the transactional work required to assist public and private companies. They work to ensure that these companies comply with laws and regulations, ultimately serving consumers’ interests. In addition, they may also advise companies on their disclosure and reporting obligations.
Most financial transactions require the issuance of securities, and attorneys must ensure that these securities are registered or exempt from registration requirements. They also assist companies with offering their securities on the NASDAQ, NYSE, and other exchanges and with the financing aspects of these offerings.
A good place for aspiring securities lawyers to start is by taking a Securities Law class while they’re in law school and various business-oriented classes.
Brokers and other financial professionals must follow strict rules when conducting transactions and abide by the highest standards of ethics and professionalism. Unfortunately, these professionals don’t always uphold their duties and can cause financial devastation for investors. If you’ve suffered losses due to the misconduct of a broker or other financial professional, a securities lawyer in New York can help.
Litigation
Securities lawyers often have to defend their clients against litigation, whether brought by private parties or regulators. They can be involved in disputes relating to insider trading, shareholder disputes, contested M and A bids, or corporate governance matters. These issues can all lead to various litigation-related claims that a lawyer might have to deal with, including liability and breach of fiduciary duty.
Brokerage firms, stock brokers, and financial advisors must uphold a high standard of care to ensure they don’t engage in fraud or negligent behavior that could result in investors losing money. However, brokerage firms and their employees don’t always comply with these obligations and are liable for investors’ losses when they fail to act in good faith or commit misconduct.
Investors who lose money due to a broker or financial adviser’s actions can bring a claim against them. Still, many of these cases require arbitration through FINRA (the Financial Industry Regulatory Authority). A securities lawyer with experience dealing with these claims through FINRA can help you recover your losses. These attorneys often work on a contingency fee basis, meaning they only get paid if they recover funds for you. If they don’t, they don’t charge you a dime. Moreover, they can provide a free consultation to evaluate your case.
Arbitration
Securities lawyers often handle arbitrations brought by investors against broker-dealers. These disputes are usually resolved in FINRA arbitrations, which have the same rules and procedures as lawsuits. FINRA oversees the brokerage industry and enforces state and federal securities laws. Investors who have lost money on investments are often entitled to compensation through FINRA, the SEC, and other federal and state agencies. A knowledgeable attorney will help clients determine whether their losses resulted from regular market forces or misconduct by brokers.
Investors must bring physical evidence such as contracts or receipts and witnesses to testify during an arbitration hearing. The arbitrators will listen to all the evidence presented and decide how much weight it should have. Unlike courtroom trials, the arbitrators do not exclude evidence based on objections from lawyers or other reasons.
Investing in securities is risky, and it is difficult to predict the future. While market fluctuations cause many investment losses, some fail because of fraud or other misconduct by brokers and others in the financial industry. Securities litigation is a highly specialized field. Before choosing an attorney, ask about the attorney’s experience representing investors in securities arbitrations. Some law schools offer securities arbitration clinics, where student attorneys under faculty supervision represent investors in disputes with their brokers. However, these students are not lawyers and do not have the protections of attorney-client privilege and malpractice insurance that apply to legal practitioners.
