Valenti Hanley PLLC

Legal Issues Blog

Merger objections drive a huge increase in securities litigation

A lot of people are more concerned about private security than private securities. But more and more individuals and companies are looking to securities litigation as a good way to protect wealth and interests in the market.

  • Is securities litigation a big part of the practice of law?

Compared to torts or criminal cases, litigation surrounding securities sale or trade is relatively small. But it has been steadily growing. 2018 was the fourth consecutive year in which numbers of securities cases went up. Only in 2001, the height of the IPO laddering case boom, had more filings.

  • What has contributed to the increase?

How to effectively manage conflicts in business

Conflicts can arise in all aspects of life, and they need to be handled appropriately when they occur. If they are not handled effectively, they can become bigger issues that affect the success of a business in the long term.

Disputes may arise between coworkers or between businesses that are working together. Regardless of the parties involved in the dispute, it can be useful to follow the same general principles. The following are some steps to take when trying to address a dispute in the working environment.

Do I have to register securities in Kentucky?

All securities that are offered or sold here in Kentucky must be registered. This is required by state law. There are some rare instances in which a security is covered or exempt and may not have to be registered though.

Anyone wishing to register a security in the state must file various documents including the U-1 and U-2 forms with the Kentucky Department of Financial Institutions (DFI). Applicants must pay a $125 examination fee and between .06% and 1% in registration fees on the total securities that will be offered for sale. The lowest amount that an applicant may have to pay for the latter is $60. The highest is $1,200.

What are Blue Sky laws?

Investors in Kentucky and other parts of the United States are protected by both federal and state securities regulations known as Blue Sky laws. These rules are in place to protect investors from falling prey to deceptive sales tactics and other fraudulent activities.

While these regulations vary by jurisdiction, almost every state requires any securities offered up for sale to first be registered with them. There are some exemptions to this rule though.

More individuals and companies may invest in startups soon

On Dec. 18, the U.S. Securities and Exchange Commission (SEC) announced that they plan to redefine the terms "qualified institutional buyer" and "accredited investor". They also highlighted their plans to allow additional institutions and individuals to invest in startups than have been allowed to do so previously.

Up until this latest SEC proposal was announced, individuals or entities were required to have $200,000 in annual income or at least $1 million cash to be classified as an accredited investor. Under the new proposal, individuals who'd recently obtained a stockbroker's license and other related credentials would be able to invest in these private capital markets (PCMs), even if they didn't have the requisite capital to do so.

Business courts promise to make litigation easier in Kentucky

Business is booming in the Bluegrass State. The high rate of business formation in Kentucky, combined with the influx of existing companies' operations into the state, is good news for local economies and would-be employees alike.

The legal system in Kentucky is working to stay ahead of the needs of these businesses because higher levels of commerce almost always brings more demand for litigation between sparring parties. This is why the state's first business court will be gaveled into session at the beginning of 2020.

Who is your financial advisor actually working for?

When you met your financial advisor, everything seemed great. They wore a suit, shook your hand, made small talk, put you at ease and demonstrated that they had the knowledge and experience you were looking for. You wanted to find someone who would help you get the most out of your money, especially as you get closer to retirement, and you thought you had found that person.

Now you're starting to wonder, though. Maybe the returns do not look like what you expected. Maybe the fees are higher than you realized they would be. Do you wonder who your financial advisor is actually working for?

Beware of excessive trading of your securities

If you have an investment portfolio, then you likely realize that the primary way your financial advisor earns money is by taking a commission by buying and selling securities on your behalf. While your financial advisor has a fiduciary duty to make choices that are in your best interest, some portfolio managers engage in impropriety such as excessive trading or churning accounts. This isn't only illegal, but it can be costly for investors.

Churning refers to a process by which an investment portfolio manager frequently buys and sells off securities. If a money manager does this excessively to increase their commission, then their actions may be deemed to be illegal.

Could an attorney help you with your mineral rights?

There is often a lot of confusion about mineral rights. While someone else may own the land and the buildings above the ground, another person or corporate entity might have ownership of the mineral rights below the surface.

The first place to start if you are trying to acquire the mineral rights to a property is to discern whether they have been severed from the surface estate. Still confused? Here's how that works.

Could you face charges of insider trading?

You may think that it's highly unlikely you will ever need a securities law attorney. After all, the trades you've made on the market were always transparent and above-board.

However, you could get caught up in something you never anticipated. Maybe your broker got involved in some unauthorized trading and tried to shift the blame to you. The fallout could be swift and serious.

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Valenti Hanley PLLC
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Louisville, KY 40202

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