Business Law Newsletter

What are 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.

• Which Business Entity is Right for You?
  If you are thinking of starting a business, you have many important decisions to make. One of the most important of these is choosing your business entity. There are a number of different types of business entities, and each... Read more.
• Protecting Trademark in a Business Name with Cease and Desist Letters
  Trademark owners generally have exclusive rights to use their mark to label or identify their goods and/or services. Accordingly, trademark rights in a business name give the mark owner the right to use the name for commercial purposes,... Read more.
• Employer Liability for Employee Online Activity
  Many employers, recognizing the business advantages inherent in its use, regularly provide their employees with access to the Internet. Increased employee access, however, has resulted in increased employer liability. Employee misuse of... Read more.
• Tax Treatment of Contaminated Property
  The Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) imposes liability for the investigation and cleanup of contaminated real property without regard to whether the landowner created or allowed the... Read more.

• Family of 14-year-old Who Died on American Airlines Flight Sue Over Faulty AED and Poorly Trained Crew
• NYPD Officer Guarding Eric Adams' Residence Faces Federal Lawsuit for Allegedly Shooting Man Trying to Enter Own Apartment
• Candidate’s Wife is Not a Limited-Purpose Figure in Libel Suit
• Cars Still Under Warranty Can Be Classified as “New” for Purpose of Lemon Law—For Now
• Supreme Court Clears Texas to Enforce Controversial Immigration Law