California State and Federal Securities Issues:

1. Statue and Regulations

Federal securities laws, which deal with the regulation of stocks and bonds (securities), derivatives and other investments are very complex and voluminous.  These laws also authorize the Securities and Exchange Commission (SEC) to issue its own rules and guidelines regarding investments as it is the federal agency with the general oversight responsibility for the securities industry.

2. History of Securities Regulation

On the heels of the Great Depression in the 1930s, the U.S. Congress enacted the first of the federal securities laws, the Federal Securities Act of 1933, which regulates the public offering and sale of securities in interstate commerce. This Act also prohibits the offer or sale of a security not registered with the SEC and requires the disclosure of certain information to the prospective securities' purchaser.

In need of an agency to enforce those regulations, Congress enacted the Securities Exchange Act of 1934, which created the SEC. Since then, Congress has charged the SEC with administering federal securities laws. The 1933 Act's registration requirements aimed to enable stock purchasers to make reasoned decisions by requiring companies to provide reliable information on their profits, losses and financial stability. The Securities Exchange Act of 1934 also regulates officers, directors, and principal share holders in an attempt to maintain fair and honest markets. The Act requires that issuers, subject to certain exemptions, register with the SEC if they want to have their securities traded on a national exchange.

Issuers of securities registered under the 1934 Act must file various reports with the SEC to provide the public with adequate information about companies with publicly traded stocks. The 1934 Act also regulates proxy solicitation and requires that certain information be given to a corporation's shareholders as a prerequisite to soliciting votes. The 1934 Act permits the SEC to promulgate rules and regulations to protect the public and investors by prohibiting manipulative and deceptive devices and contrivances via the mail system or other means of interstate commerce.

The states also regulate the sale and trading of securities.  State securities laws are commonly known as blue sky laws. Typical provisions include prohibitions against fraud in the sale of securities, registration requirements for brokers and dealers, registration requirements for securities to be sold within the state and guidance on remedial sanctions and civil liability. A majority of states have adopted at least part of the Uniform Securities Act, although notably California and New York have not done so.  Needless to say, these laws are very complex and require careful compliance.

Securities issues and matters are also overseen by the Financial Industry Regulatory Authority (FINRA), which is the largest independent regulator for all securities firms.  It monitors and regulates all securities trading, operations and records, exchange platforms, and personnel in the industry, and acts as a buffer organization between the securities markets and the SEC. It also provides a forum for investors who seek redress and compensation for a stockbroker or dealers’ unsuitable investment advice, account churning and/or unauthorized trading.

3. Orange County Attorney with Securities Expertise

Thomas L. Gourde is a skilled and experienced lawyer in securities issues and securities litigation.  He has represented investors, broker/dealers and even attorneys in securities cases and administrative actions and has had numerous dealings with the SEC regarding investment solicitation, stock trades, transfer agent opinion letters, securities registration, disgorgement claims, and investment contract issues. Mr. Gourde takes a team approach in handling securities matters and claims.  He works with investments experts and regulatory compliance officers in the handling of his cases.

If you have any questions about state and federal security issues, please contact Mr. Gourde at (949) 825-6525.

 
 

Thomas L. Gourde, Partner - Ray & Gourde, LLP
111 Pacifica, Suite 120 - Irvine, CA 92618
(949) 825-6525 - Fax: (949) 825-6544 - Email: tgourdelaw@gmail.com