securities law

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Definition

A state law that imposes standards for offering and selling securities. Such laws aim to protect individuals from fraudulent or overly speculative investments.

Overview

Originally prepared by Deepa Sarkar of the Cornell Law School...

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Facts

The Erica P. John Fund, Inc. (“The Fund”) alleges that between June 3, 1999, and December 7, 2001, the Halliburton Company (“Halliburton”) and its top executives misrepresented significant aspects of its operations. See Erica P. John Fund, Inc. v...

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Advance fee frauds involve victims paying money in the hope of receiving something of greater value. This type of fraud takes on a myriad of forms, but they share some characteristics in common. Defrauders will often reach out to an investor and...

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In this investment scheme, brokers may advise clients that they can retire early by cashing out their retirement accounts – such as a 401(k) or pension fund – and investing instead in a traditional Individual Retirement Account (IRA) with high returns...

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Affinity fraud is not a particular type of fraud but refers to all frauds targeted towards members of an identifiable group of individuals such as those with a common religion, ethnic heritage, background, or interests. The perpetrators of affinity...

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Auction rate securities (ARS) are debt or preferred equity securities whose interest rates are periodically re-set through auctions and which are issued with long-term maturities or in perpetuity. ARS were promoted as being as safe as CDs, but with a...

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An Equity-Indexed Annuity (“EIA”) is a financial product from insurance agencies that offers a minimum guaranteed return combined with a return linked to a market index. EIAs involve an “accumulation period,” when an investor makes a lump sum payment...

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The Internet can serve as an efficient tool for investors, but it is also an excellent tool for defrauders. The Internet allows individuals or companies to reach tens of thousands of people by building a web site, posting a message on an online...

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Companies may pay people to write online newsletters recommending the stocks of these companies. Federal securities laws require the newsletters to disclose who paid for their product, the amount, and the type of payment. Many fraudsters fail to do so...

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Financial seminars are a marketing tool often used by broker-dealers and other entities to attract prospective clients. These seminars may be invitation-only or they may be advertised in local papers or on the internet. Financial seminars are often...

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