Business Law Newsletter

Who Regulates Securities?

“Securities” is a term that generally refers to shares of a corporation, promissory notes, and other liabilities. The laws regarding securities are very complex.

Securities are regulated by both federal and state laws. However, when state laws conflict with federal laws, the federal laws prevail. Both sets of laws usually require proper registration with an agency that regulates securities, such as the Securities and Exchange Commission (SEC).

The primary federal laws that regulate securities in the United States are the Securities Act of 1933 and the Securities Act of 1934. The former regulates the issuance of shares, while the latter regulates the trading of shares.

Securities Act of 1933

The focus of this Act is the initial money-raising phase of a corporation. Primarily, the 1933 Act requires certain disclosures and registrations, with exceptions.

Securities Act of 1934

The 1934 Act focuses upon the actual trading of shares within the market. Its purpose is to prevent fraud and insider trading. It is under this Act that stockbrokers are regulated.

State Securities Laws

States are permitted to regulate securities, as long as they don’t conflict with the federal laws. Most of these laws provide for registration and fraud prevention. State laws regulating securities are also called “Blue Sky” laws.

© 2024 NextClient.com, Inc. All rights reserved.

• Liability for Injuries at a Franchise Location
  An increasing array of goods and services are offered through “franchises.” Franchising is not a new concept, but it has exploded in popularity; according to statistics compiled by Price Waterhouse Coopers in 2005 (the... Read more.
• "Made of Recycled Material" and Other Environmental Marketing Practices Regulated by the FTC
  In 1992, the Federal Trade Commission (FTC) issued the “Guides for the Use of Environmental Marketing Claims” (the Environmental Marketing Guides), which are based on data from FTC investigations, hearings and public... Read more.
• Uniformity in International Commercial Arbitration
  The general strength and momentum of the international marketplace accentuates the need to have clear rules for the resolution of international business disputes. Fortunately, since the challenges that face companies engaged in... Read more.
• Employment Law Considerations Pertaining to the Sarbanes-Oxley Act
  The Sarbanes-Oxley Act (the Act) became effective in July of 2002. The Act contains provisions that regulate the auditing and disclosure of corporate finances. Both public and private corporations may also be affected by the Act in... Read more.

• Minnesota Couple Wins $1.1 Million in a Wrongful Conception Lawsuit
• Chip Maker TSMC Sued by U.S. Employees Over Allegations of Discrimination
• $35M Wrongful Death Lawsuit Filed After Security Guard Killed at Legacy Health
• FTC Targets Popular FinTech App, Dave, For Misleading Claims and Deceptive Advertising
• Tesla Faces Class Action Lawsuit Over Alleged "Phantom Braking" Defect