If you believe you have been scammed or you need advice about investment or securities, it definitely helps to seek legal counsel and advice. In this case, you need someone who is familiar with investment laws and regulations – someone who understands the tactics used by less-than-scrupulous individuals in the investment field.
To seek the best legal investment services, you first should define the role of a securities lawyer. What exactly are his or her duties or responsibilities? How can he or she help you?
How a Securities Legal Professional Helps Clients
The work performed by a securities attorney can assist you in safeguarding your investment choices. He or she can help you with research and support your efforts in learning more about the history and financial standing of a company. He or she can also advise you about your broker’s legal responsibilities.
Key Legal Responsibilities of a Broker
A broker must perform in a manner that assists his or her client with the following:
- Determining whether a financial investment is a suitable solution for them.
- Disclosing all the required data about a recommended security.
- Working to place the client’s financial interests before his or her own financial stakes. This is defined as a fiduciary duty.*
*More about Fiduciary Responsibility
A fiduciary duty involves a duty of care to a client. Therefore, a stockbroker, who serves as a fiduciary, has the ethical responsibility to be honest and transparent with the clients he or she serves. When a fiduciary neglects to meet this standard of care, a securities lawyer can be retained to sue a broker (fiduciary) or his or her firm.
Types of Advice Security Legal Professionals Provide
You can use the services of a securities lawyer to keep you from getting scammed or to safeguard your investment portfolio from mismanagement.
Claims Handled by a Securities Lawyer
A securities lawyer handles a large number of claims that focus on investor losses. Some of these claims relate to the following legal matters:
- Fiduciary duty breaches
- Problems with conflict of interest
- A failure to supervise or diversity investment holdings
- Sharing insider information
- Manipulation of the market
- Omission of facts or misrepresentation – any type of dissembling
- Risky investing
- The unsuitability of an investment
- Placing a trade without authorization
- Excess trading to make more in broker fees, also called churning
Examples of Legal Representation
A securities legal professional represents individual investors in cases where a class action lawsuit is filed or a lawsuit arises from the illegal actions of a broker. Broker contracts often contain arbitration clauses. Therefore, you need an attorney’s help to see exactly where you stand. In some cases, these clauses can restrict your ability to pursue legal action.
On the other hand, you can also use the services of a securities lawyer to review a broker agreement before you sign up with a brokerage firm. A lawyer’s review of a broker contract can help you get the details you need before committing to a broker’s services or advice.
A securities legal professional may also work for a corporate client in processing transactions that involve initial public offerings called IPOs. In addition, they provide support for stock issuances, the sales of securities, or mergers and acquisitions. In these instances, they work to ensure that clients remain compliant with SEC laws and regulations. This also assists in benefiting consumers.
Questions You Need to Ask
Now that you understand how a securities lawyer helps his or her clients, you need to research their background and their specialties. To do this, you need to answer the following:
- What type of education or training has the lawyer received?
- What do clients say about him or her?
- Does the attorney work for corporate clients and, if so, who?
- What is the attorney’s success rate for receiving settlements for financial losses?
Doing Your Homework
Once you answer these questions, you need to do the following:
- Research the lawyers in your area listed with the American Bar Association.
- Review the backgrounds of the attorneys who interest you.
- Find out how much the attorney charges for giving securities advice or for righting a financial wrong.
- Research the attorney’s firm.
Communicating with an Attorney
Don’t choose a lawyer who makes you feel uncomfortable about broaching certain topics. You should feel free to express yourself so you get the needed advice. The attorney you retain should make it easy to contact him or her. While he or she may have several clients, it still is important to ensure communication is ongoing and easily accessible.
Give the Attorney a Call
To ensure good communications, contact the attorney by phone. If he or she was not available, did they return your call immediately or in a timely manner? If not, it may be better to seek other legal counsel or advice.
Getting a Referral
Besides checking out American and State Bar Associations, you can also receive professional referrals of attorneys in your area. However, keep in mind that this type of referral may be difficult to get. That’s because legal referrals frequently come from better-known legal specialties, such as estate law, business law, or real estate.
Communicate with Your Network
If you are part of the Chamber of Commerce or a local organization, ask other members about attorneys they may use for securities advice.
Narrow Down the Lawyer’s Specialties
Your reasons for retaining a securities lawyer are unique to you, so you need to carefully scrutinize your choices. Choose a lawyer who can confidently manage your case or provide advice that directly relates to your legal obligations or concerns.
For example, it is better to choose a lawyer whose record shows he or she regularly assists corporations with SEC matters or filings if that is your intended goal. Some securities lawyers focus more on malpractice than on providing corporate support. Therefore, some securities lawyers may not specialize in an area where you need assistance.
Retaining a Lawyer’s Services
Making the choice for a securities lawyer must be done with specificity. By taking this approach, you can find an attorney that can help you with your unique inquiries about securities.