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Companies can’t skirt securities laws

| Nov 14, 2018 | Regulatory Work |

A company that is offering securities has to ensure it is in compliance with applicable laws. These are meant to provide current and potential investors with the critical information that might impact their decision on an investment.

The laws that must be followed are present on state and federal levels, so companies have to learn which ones apply to them. On the federal level, the two primary laws are the Securities Act of 1933 and the Securities Exchange Act of 1934. Both of these were established in response to companies that were failing to offer critical information to investors in the 1920s in an effort to make the stocks and bonds seem promising.

These laws apply to companies that offer private or public securities. While there are some limited exceptions to this, most companies will have to com comply with them. If a business doesn’t follow the securities laws that apply to it, there can be criminal charges levied. It is also possible to have to answer to the Securities and Exchange Commission (SEC), and civil lawsuits might be filed in some cases.

Any company that offers securities can benefit from having a securities attorney It is a good idea to have this professional in place before the first offering. If your company didn’t do this, you can still hire one even if you aren’t facing legal issues. This gives the attorney a chance to learn more about the workings of the company so they can ensure that you are in compliance with applicable laws. This knowledge will also help if accusations are made against your company that require a legal response.