National securities laws are issued by the U.S. Securities and Exchange Commission (SEC) and the United States federal government. Securities laws are used to regulate and govern those U.S. companies that deal in securities, as well as to regulate publicly traded companies. Any company that either offers shares for sale on the public stock market or deals with the sale and exchange of securities in the United States has to abide by SEC regulations, including the laws set forth in the Securities Act of 1933.
Security laws state that any company that sells a security to an investor must, before the sale of the security, inform the investor of all pertinent information about the specific security being sold or traded. Privately held companies generally do not have to comply with the full range of SEC securities laws, although they may have specific anti-fraud and anti-monopoly laws that govern the way they do business.
Because securities laws apply so broadly, any company that either receives, sells, or trades securities on the U.S. stock market is subject to and must abide by securities laws. These laws impose a number of different requirements on the entities they apply to. For example, in addition to requiring disclosures, securities laws also mandate that any company dealing in securities is prohibited from misleading potential investors in any aspect of the sale or trade of the securities. These requirements also stipulate that full disclosure must be given to any potential purchaser or receiver of the securities after they are traded, as well as before they are traded. Failure to comply with these securities laws and regulations could result in a myriad of penalties, up to and including the forfeiture of the company.
If you believe that a company has acted in violation of SEC securities laws or regulations, contact a securities attorney as soon as possible to determine the proper course of action.