Selling Corporate Stocks
While there are a lot of people who are willing to invest their money on start-up businesses, and these businesses are more than eager to take in those investments, there are a plethora of laws that control exactly how and to whom you can accept these funds. Due to the countless stock frauds that have occurred in the past and in recent years, harsher criminal penalties have been meted out to those who do not follow these laws.
Securities are investments in businesses. They may come in the form of shares of stocks, bonds, loan or mortgage packages offered by financial institutions, financial instruments that represents investment in a company or an international project.
Securities laws are partly transactional (e.g. when loans are bunched up and sold as a security to a financial institution or an investor group), partly regulatory (e.g. the SEC heavily regulates the issuance of securities), and partly litigation (e.g. when fraud charges have been given to an issuer in connection with the purchase or sale of securities).
Issuance of securities are subject to both federal and state security laws. The Securities Act of 1933 is a federal law that requires securities sold to the public to bear complete information about the seller of the stock as well as making the stock offering available to investors, and having these sold stocks registered with the SEC. The Securities Act of 1934 regulates stock exchange and trading operations. The aim of these laws covering sales of securities is to provide full disclosure of risks involved in the investment to all potential investors and to protect people who put up money to invest in a business. Back in the 1930’s during the great stock market crash many people took their own lives because they were swindled of all their life’s savings, and because of this the US government made sure that these instances will not happen again. This is when Securities lawyers become very valuable in that they help clients navigate these complicated federal and state regulations.