Trying the most complex issues
for over 30 years.

Trying the most complex issues for over 30 years.

Demystifying Securities Regulation

Many people, including a lot of lawyers, are intimidated by the government regulators who handle securities. But, not our attorney, Otto K Hilbert II. At Otto.Law, there is no area of law too technical for him to understand. He puts the time and research into understanding what the problem is and building a case to get the results our clients deserve. He has often gone toe-to-toe with the U.S. Securities and Exchange Commission (SEC) on behalf of oil and gas partnerships and other businesses – and won.

What Is Securities Law?

Securities regulation is often thought of as a convoluted area of law, full of government oversight. Essentially, securities are instruments that individuals use to allow others to invest in their businesses. They might be in the form of stocks, mutual funds, bonds or other investments. They are regulated by the SEC, which exists to prevent fraud, insider trading and manipulation of markets.

The ability to sell securities is important to many businesses, especially those seeking investors for the first time. Emerging business ventures in new industries, like cryptocurrency and marijuana production, should consider consulting with a securities attorney to learn how they can grow their businesses in compliance with the law.

What Is Securities Litigation?

Securities litigation refers to lawsuits over investment losses that are caused by something other than market forces. These claims often involve conflicts of interest, breaches of fiduciary duty, insider trading, market manipulation and misrepresentation. Businesses that sell securities are obligated to provide certain information to investors, and failure to do so can lead to lawsuits.

Below are common questions that our attorney receives about securities law.

Is arbitration right for my case?

In some cases, an investor or business will end up in arbitration over investment losses. In fact, arbitration for civil actions involving securities has dramatically increased over the last few decades. One of the benefits of arbitrating these cases is that the decision-makers already are familiar with securities issues, meaning that you can resolve these disputes faster through arbitration than a jury trial.

What legal obligations do investment banks, brokerage firms, financial advisers and stockbrokers have in handling investor funds?

All these fiduciaries have a significant obligation to act in the best interests of their clients and prioritize their clients’ needs over their own. This generally means providing clear and accurate disclosures about investment products and strategies to their clients as well as any potential risks, fees and conflicts of interest.

What is the difference between normal investment losses and securities fraud?

No investment is ever totally risk free. Normal investment losses occur as results of market fluctuations, economic conditions, poor investment choices and other inherent risks.

Securities fraud involves intentional deceptive practices aimed at manipulating the securities market or investors.

What is considered securities fraud?

Securities fraud refers to a wide range of actions related to the intent to deceive investors for financial gain. It can include:

  • Misrepresentation or false statements about a company’s financial condition
  • Insider trading or front-running based on non-public information
  • Ponzi schemes and “churning” trades to generate commissions
  • Cherry-picking, or selectively allocating profitable trades to favored clients
  • Market manipulation using “pump and dump” schemes or other means

Securities fraud can take various forms and may involve individual fiduciaries and companies.

How does the SEC investigate potential securities fraud?

The SEC can perform an informal investigation, which is broader and relies on the information the individual provides, or a formal investigation, which is more serious and happen after the SEC has evidence of a violation.

In an informal investigation, the SEC will review the available evidence and decide whether to take enforcement action. In a formal investigation, the SEC will rely on its subpoena power to gather evidence, documents and information.

What happens when a case is brought before the financial industry regulatory authority (FINRA)?

When a case is brought before FINRA, two types of dispute resolution are available instead of proceeding to litigation. Mediation involves the parties coming to an agreeable solution. Arbitration uses an impartial third party who listens to both sides and makes a binding decision. FINRA arbitration is completed before a panel of arbitrators selected by the parties.

What is the role of a securities litigation attorney?

A securities litigation lawyer can provide crucial guidance and representation to individuals and corporations. As it is a highly specialized area of law, our lawyer has valuable experience navigating sensitive matters and high-stakes situations. He can defend you against various securities claims and represent you through litigation, mediation and arbitration.

Experience That Matters

With so much securities arbitration going through FINRA, you need an attorney with solid experience with the organization. As a FINRA arbitrator and judge for over 20 years, Mr. Hilbert has seen all sides of FINRA arbitration matters.

He has worked for claimants and respondents and has served as an arbitrator in countless cases throughout his career. Mr. Hilbert is also an arbitrator for The Federal Bar in Denver and serves as a mediator, CBOE and arbitrator for the National Futures Association. He uses this experience to provide comprehensive, diligent, knowledgeable representation from litigation to arbitration.

Contact A Denver Securities Litigation And Arbitration Lawyer

To learn more about how to handle securities disputes, contact us in Colorado by calling 303-927-0142. You can also request an appointment using our online contact form.