Securities Law
A security represents an investment in a business. Securities take many forms: shares of stock or partnership units in Microsoft, Amazon.com, or a friend's at-home cleaning business; bonds issued to finance a community building project; a package of loans or mortgages offered for sale by a financial institution; or a financial instrument representing an investment in an electric power generation project in a developing country. An investment in any of these securities has its risks as well as its rewards. Securities lawyers are involved in transactions related to the generation, management, and transfer of these assets or debt instruments. As part of their practice, securities lawyers often become involved in advising their clients concerning the types of instruments and legal structures available for raising capital for businesses.
Both state and federal laws regulate the sale of securities. The Securities Act of 1933 is a federal law which requires that securities sold to the public be registered with the federal government (through the U.S. Securities and Exchange Commission) and that complete information regarding the seller of the stock and the stock offering itself be available to investors. The Securities Act of 1934 governs the operation of stock exchanges and trading. Securities lawyers help their clients through the maze of federal regulations and the equally complex state regulations, which are sometimes referred to as "blue sky" laws. Blue sky laws were given their unusual name in a case in which the court said that the speculative schemes involved had no more basis than so many feet of blue sky. (State v. Cushing, 137 Me. 112, 15 A.2d 740 (1940))
Reproduced from The Official Guide to Legal Specialties with permission. (c) 2000 Thomson Reuters/West. For additional information on this publication please visit 
http://west.thomson.com/products/law-students. Copyright granted via e-mail by Donna Gies, September 16, 2008.