Securities Law

Negotiable Instruments (securities law) are any form of ownership that can be easily traded on a secondary market, such as stocks and bonds. It also includes their derivatives, such as futures contracts, options, or mutual funds. Traders must be licensed to buy and sell securities to assure they are trained to follow the laws and regulations set forth by the Securities and Exchange Commission (SEC). Blue Sky Laws are used by the States to enforce securities law and protect investors.

The Securities and Exchange Commission is the federal agency predominantly responsible for administering and enforcing federal Securities laws. The SEC attempts to protect investors by ensuring that the securities markets are honest and fair. When needed, the SEC enforces securities laws through a variety of means, including fines, referral for criminal prosecution, revocation or suspension of licenses, and injunctions.

Headquartered in Washington, D.C., the Commission consists of five (5) members appointed by the president, with one position expiring each year. No more than three (3) members may be from any single political party. With more than 900 employees, the agency has five (5) regional and six (6) district offices throughout the country and enjoys a generally satisfactory reputation.

The Commission enforces the numerous laws and regulations under its jurisdiction in a number of ways. The SEC may seek a court injunction against acts and practices that mislead investors or otherwise violate securities laws; suspend or revoke the registration of brokers, dealers, investment companies, and advisers who have dishonored securities laws; refer persons to the Justice Department for criminal prosecution in situations involving criminal fraud or other willful violation of securities laws; and bar attorneys, accountants, and other professionals from practicing before the Commission. The SEC may also conduct investigations to determine whether a violation of federal securities laws has transpired. The SEC has the power to subpoena witnesses, administer oaths, and compel the production of records anywhere in the United States.

When an SEC investigation uncovers evidence of wrongdoing, the Commission may order an administrative hearing to determine responsibility for the violation and impose sanctions. An administrative hearing is held before an administrative law judge, who is an independent SEC employee. The hearing is comparable to that of a non-jury trial and may be either public or private. After the hearing, the judge makes an initial written decision containing findings of fact and conclusions of law.

Willful violations may be punished by fines and imprisonment. The SEC refers such cases to the Department of Justice for criminal prosecution. "Willfulness" means only that the defendant intended the act, not that he knew that it was a violation of securities laws.

For more information on Negotiable Instruments and Securities law, review the resources below. Additionally, you can find an attorney in your area who can assist you with your legal questions and issues by visiting the Law Firms page of our website.


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Articles About Securities Law

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