When a company is looking to sell its securities, its owners must be aware of the laws in place that regulate securities across the United States. These laws were put in place mainly to protect investors and to increase transparency so that buying and selling could take place with full disclosure.
If you invest your time or money into a company in the state of New York, it is likely that you will be doing so based on the information that you believe to be true about the organization. When this information proves to have been incorrect, your investment could be a poor one. If the company has intentionally misled you, they could be guilty of securities fraud.
Companies going public and offering stocks must follow specific rules. When they don't, there is a chance that criminal charges might follow. In some cases, civil lawsuits are possible. It is imperative that anyone who is in this profession understands what they are expected to do to avoid legal issues.
Securities fraud can cost you time and money. In some cases, you might be stripped of voting rights and other duties that come with being involved in publicly traded companies. Elizabeth Holmes, founder of Theranos Inc., recently entered into a deal with the U.S. Securities and Exchange Commission (SEC) that has several implications for her future.