Securities are publicly traded investments. They are an excellent way to build an investment portfolio and make a decent amount of cash safely. Up until a few decades ago, however, securities had no governing laws, rules, or restrictions, which made them not so safe for investors who were not so savvy. When securities laws were constructed and introduced, they were invaluable for a number of reasons. Here is what securities law does, and why you will be very glad that these laws exist.
Protect the Investor
A security cannot be bought, sold, or traded without some very strict rules in place. Those rules can sometimes feel too restrictive, but they exist to protect you, the investor. Far too much fraud was conducted on unsuspecting people prior to the existence of this branch of law. As such, those investors lost millions to the crooks that defrauded them. You certainly would not want to be defrauded of your hard-earned money, and you definitely would want to be sure that you get your investment back if the security is not making money. Ergo, securities law exists to protect you, all the money you invest, and the money you are promised to gain by investing.
Protect the Company Offering the Security
Some of the securities laws exist to protect the companies offering securities to investors. That is because there are still unscrupulous investors who attempt to do inside trades, among other illegal acts. The companies offering securities lose money when fake/phony investors or crooks commit these financial crimes. The laws give the companies the right to pursue the crooks to regain some losses, which would not ordinarily occur between investor and security company.
Why You Should Be Glad That These Laws Exist
You are backed, protected, and insured by these laws. Your investments and the related contracts have to be honored according to the legal documents that accompany the purchase of securities. If you are part of a company that sells securities, the law protects your rights to regain losses created by criminal acts. Such laws give everyone, from the investment company to the investor, specific protective rights to make a profit in this field. You accept the naturally occurring consequences of loss and gain, without punitive measures against the buyer or the company offering the investment product. To make sure these laws are followed, securities law attorneys practice in this area, and provide you with sound advice if you think you have been cheated.
Visit a site like http://www.carterwestlaw.com for more help.
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