Securities laws regulate the marketing and selling of securities, with violators facing fines, license revocation, and jail time. Before filing a lawsuit, individuals should attempt to resolve the issue with the offending party or their supervisor. Plaintiffs must file a complaint with regulators and may need to hire a specialized attorney. Cases can be civil or criminal and may take months or years to resolve.
In most countries, there are strict laws governing the practices of people who market and sell securities. Individuals who violate securities laws can lose their securities licenses, face fines, and even spend time in jail. The laws in most countries allow people to bring a securities lawsuit against a broker or investment firm that has not acted in the best interests of the clients, but in most cases there are several preliminary steps that must be taken before a cause can begin.
Anyone who believes they have been misled by an employee of an investment firm or private broker should first contact that individual or firm and attempt to resolve the situation. If the offending party refuses to resolve the matter amicably, the aggrieved party should contact the person’s immediate supervisor or the company’s compliance officer. Anyone planning to file a securities lawsuit should keep detailed records of all interactions related to the matter, including copies of all emails and letters he sends or receives. Many securities claims arise from misunderstandings that can be resolved without a lawsuit, but if the individual or business involved refuses to resolve the matter, legal proceedings can begin.
Securities laws in most places require plaintiffs involved in a securities lawsuit to file a formal complaint with the regulatory authority that supervises the individual or business involved in the complaint. Regulators in some countries have the power to arbitrate securities disputes. Arbitration requires a neutral third party to investigate the matter and arrange an agreement between both parties to resolve the matter. If arbitration does not resolve the matter or if the regulators do not have the power to arbitrate, the regulators will advise the plaintiff on how to pursue the suit.
Plaintiffs normally must hire an attorney from a law firm specializing in securities law. Legal fees are often expensive, although some lawyers will agree to work for free upfront in exchange for receiving a percentage of any cash settlement the plaintiff receives upon conclusion of the case. The plaintiff must provide the attorney with copies of all correspondence and other documents relating to the claim and evidence that the securities regulators have been notified of the claim.
Matters relating to financial losses caused by mismanagement are usually civil in nature, while fraud situations are resolved in criminal proceedings. Securities regulators will advise the plaintiff whether to pursue the matter in a civil or criminal manner. In situations involving large corporations, the plaintiff’s attorneys can publicize the case in order to find out about any other individuals who have suffered losses as a result of the same mismanagement and create a class action lawsuit. Prosecutors investigate cases of fraud and try to find other people or companies who have directly or indirectly suffered the consequences of the fraud. Depending on the complexity of the case, lawsuits can take months or years to resolve.
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