The Federal Securities Laws

Not all securities related claims are subject to arbitration before the Financial Industry Regulatory Authority. Stockbroker fraud or fraud in connection with the sale of securities is prohibited by federal and state laws. Private causes of action for stockbroker fraud, and investment fraud including churning, suitability, and other violations of the federal securities laws, such as the failure to supervise, generally, are recognized under Section 10(b) of the Exchange Act of 1934, and SEC Rule 10b 5. Private causes of action against stockbrokers for fraud, or claims, arising from the sale of unregistered securities, or new issues, involving fraud, or the failure to disclose material facts, are authorized by Section 12(2) of the Securities Act of 1933.

Fraud in connection with the sale of securities, or the sale of unregistered securities is prohibited under the laws of all States. Most states provide for a private right of action for these violations to recover damages, and certain states, by statute, provide for the recovery of exemplary damages, together sometimes with interest, costs, and reasonable attorney’s fees. Other state law claims, including common law claims for negligence, breach of fiduciary duty, breach of contract, and statutory claims, such as claims for elder abuse, or unfair trade practices, coupled with federal claims may be brought in federal court, or may be brought by themselves in state court.

The Guiliano Law Firm has extensive experience in the litigation of securities related matters, both in state and federal court, including the litigation of securities class actions against issuers in open market fraud actions, and shareholder derivative actions against issuers and their officers and directors for the violation of the federal securities laws and state corporate law.

In addition to serving as counsel and/or co-counsel in a series of national securities class actions, and shareholder derivative claims, the Guiliano Law Firm was recently successful in the transfer and consolidation of nine separate actions pending in federal court in five different jurisdictions, before the United States Judicial Panel on Multidistrict Litigation, consummating in a multi-million dollar settlement for a group of injured investors.

State Law

State law, even among states adopting the Uniform Model Securities Acts, varies. State law, or blue sky law, related to the issuance of securities is generally modeled after the Securities Act of 1933. Most states, with the exception of perhaps New York, provide for a private right of action for the violation of registration requirements or anti-fraud provisions of the state’s securities acts in connection with the issuance of securities, generally without regard to whether these misstatements were intentional.

Also generally, most states adopting the Uniform Model Securities Act, contain anti-fraud provisions which are analogous to the anti-fraud provisions of the Securities Exchange Act of 1934, and which provide for civil liability for misstatements and omissions or material fact in connection with the sale of securities. However, some states only provide that only the state can pursue these violations and no private right of action exists. At least one state, Pennsylvania only allows these claims against issuers and not stockbroker intermediaries, and yet in other states, states that provide for enhanced remedies such as statutory interest, attorney’s fees, or in some cases treble or triple damages, also provide that the prevailing party is entitled to legal fees, which, when invoked, have been construed to mean if the investor does not win, the investor may be required to pay the brokerage firm’s legal fees.

 Guiliano Law Firm

Our practice is limited to the representation of investors. We accept representation on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.

To learn more about FINRA Securities Arbitration, and the legal process, please visit us at securitiesarbitrations.com