The Responsibilities Of A Securities Attorney

byAlma Abell

A security is any stock, bond or other debt note, securities are issued by companies who wish to raise cash or mitigate debt. There are two ways to exchange securities; the primary market and the secondary market. The difference between the two is the manner in which the securities are sold, in the primary market the security is sold directly by the issuer while in the secondary market the securities are traded amongst parties that have no direct relationship with the issuing company. The security exchange act is that which regulates secondary trades and is that area where the involvement or assistance of a securities attorney in Sacramento area is most often needed.

There is a wide range of areas where a security attorney can work, some of the more common are:

Derivative actions: A derivative action is a lawsuit that is brought against the officers of a company by the shareholders. In most cases the claim is made that the senior managers and officers have breached their fiduciary duties. The plaintiffs, the shareholders will seek termination of the wrongful acts as well as compensation from the rogue employees directly back to the company.

Federal and state lawsuits: Depending on the type of claim which is asserted a lawsuit can be brought in either Federal or state court by a shareholder to recover investment or asset losses which are the direct result of corporate malfeasance or fraud.

Class actions: Just as individuals can file suit, a securities attorney in Sacramento can be asked to file a lawsuit on behalf of classes of shareholders who have similar claims and interests. This is beneficial for shareholders as the cost of litigation against large publically traded corporations can be huge; class action allows recovery for the shareholders but with a smaller financial burden.

The action is filed by the attorney who represents the individuals who serve as class representatives. The representative must be approved by the court and must have a claim similar to the other class members. In the event the case is settled between the corporation and the representative all members of the class can do one of three things; take a pro-rata share of the settlement, disagree with the settlement and pursue independent separate litigation or participate in the settlement with certain objections.

Security laws are quick to change, as a result of a number of large financial scandals as well as the financial collapse of 2008 the courts have looked closely at securities and have made a number of decisions which have set new precedent, it is the mandate of the securities attorney in Sacramento to stay current on all developments that affect securities law.