Securities Law
Securities law is the branch of the law that deals with securities issued by corporations and governments:
- Stocks
- Bonds
- Debentures
Federal and state securities laws regulate securities.
Federal securities laws
The Security and Exchange Commission (SEC), established by the Securities Exchange Act of 1934, administers federal securities laws, including the Investment Company Act of 1940 and the Investment Advisers Act of 1940. Other federal laws include the Sarbanes-Oxley Act of 2002, touted by President Bush as "the most far reaching reforms of American business practices since the time of Franklin Delano Roosevelt." This act mandated a number of reforms to enhance corporate responsibility, enhance financial disclosures and combat corporate and accounting fraud, and regulate the auditing profession in the wake of the Enron scandal.
State securities laws
State laws, known as Blue Sky Laws, typically provide far greater protection to the investor than the federal securities laws. Blue Sky Laws address:
- Prohibition against fraud in the sale of securities
- Registration requirements for brokers and dealers
- Registration requirements for securities to be sold within the state
- Sanctions and civil liability
- Requirements for companies to fully disclose all material facts relating to a securities offering
- Merit reviews to regulate disclosure and merits and fairness of a company’s securities offering to investors
The Uniform Securities Act of 1956 guides state regulation. The act was revised in 1985, 1988, and again in 2002. Twelve states have adopted the 2002 act, endorsed by the American Bar Association:
- Hawaii
- Idaho
- Indiana
- Iowa
- Kansas
- Maine
- Minnesota
- Missouri
- Oklahoma
- South Carolina
- South Dakota
- Vermont
Links of interest
Click on the links below to get more information on securities laws:
Researching the Federal Securities Laws through the SEC Website
Securities Law
Uniform Securities Act
Blue Sky Laws
The Willeford Law Firm—the investor’s choice for legal recovery of financial loss
If you believe you lost money in an investment through another’s wrongdoing, contact the securities attorneys at the Willeford Law Firm. We represent investors and guide you through the claims process, reducing your emotional and financial stress.
Call our securities lawyers at 1-800-706-5196 to schedule your free consultation or use the online form to tell us about your situation.
