The Securities Act of 1933 and the Securities Act of 1934 are complex and often difficult for businesses to navigate. It is the job of a securities lawyer to help clients navigate these and other complicated federal and state regulations concerning securities.
Securities lawyers may be involved in the transactional component of the issuance of securities, which are investments in a business. These lawyers negotiate terms and agreements and prepare documents. A public offering of a security requires a disclosure statement with the SEC whereas a private offering only requires a private disclosure statement to be distributed to potential investors. Public offerings also usually require extensive SEC review. The Securities Acts of 1933 and 1934 have many requirements about what reports are necessary. Thus, securities lawyers could be involved with the regulatory component of securities. Sometimes there are lawsuits against the issuer of a security for fraud, a mishandled investment, or for misleading investors during the investment process. In this case, securities lawyers may be involved with the litigation component of securities law. Many broker agreements contain arbitration clauses, so there is sometimes a limited ability to go to court.
These three sub-areas (transactional, regulatory, and litigation) mean that there are a wide variety of job opportunities available within the area of law. Securities lawyers often advise corporations, small businesses, and brokerage houses or represent investors. Some securities lawyers work for the government.
In recent year, securities law has received more attention due to large scandals which harmed shareholders and investors. Securities law is intended to reduce the extent of this harm, and securities lawyers play an important role in protecting investors. The SEC notes that it, “does not evaluate the merits of securities offerings, or determine whether the securities offered are “good” investments or appropriate for a particular type of investor” (“Federal Securities Laws”).
Education and Background:
You should have a business background and an interest in business to pursue this area of law. Finance, accounting, tax, or a general business background all could be useful to understand the complicated concepts involved in securities law. Doing something with the stock market, whether that is an extracurricular, job, or internship, can also be a valuable way to learn more about this area.
The Financial Industry Regulatory Authority (FINRA) has a fantastic internship program. You do not have to be enrolled in law school yet to apply, and the internships are paid. The internships are offered in several cities and in a wide variety of specialties including finance, human resources, and technology. Here is what FINRA says about their program:
“FINRA’s Corporate Internship Program—a paid 12-week program—offers practical “hands-on” experience with the largest self-regulatory organization for securities firms doing business in the United States. Our program offers interns opportunities to build their careers—and supplement what they’ve learned in the classroom—by meeting and working with employees throughout our organization” (FINRA).
FINRA also offers legal externships. For more information, visit their
career page.
Getting a job:
One of the most important things to know about getting a job in securities law is that New York and D.C. are “hotspots” for the practice area. While there certainly are opportunities with law firms in cities across the country, the constant involvement with the SEC means that D.C. the ideal place to operate.
In addition to working for law firms (usually large firms), some securities lawyers work for the government. Many securities lawyers choose to try both options over the course of their career. Some of the government positions available are with
FINRA, the
SEC, the
U.S. Commodity Futures Trading Commission, and with state securities regulators who enforce “blue sky” laws.
Market activity impacts the amount of securities law cases and thus the number of job opportunities available. Where you get a job may depend a lot on what internship opportunities you took advantage of. If you think you want to work for the SEC upon graduation, make sure you get an internship with the SEC while you are in school.
Average salary:
Securities law is a very profitable area to work in. The Bureau of Labor Statistics reported an average salary of $192,530 in 2015 (“Securities Lawyer: Job Description and Education Requirements”).
Would you like this practice area?
You need to be comfortable with the technical aspects of securities law, which is why a business background that allows you to already be familiar with investing is particularly useful. You also need to be organized to coordinate production of all of the documents that are required. Without a genuine interest in financial markets, you will not succeed as a securities lawyer. Because cases are often long and complex, patience and attention to detail are key.
Consider whether these articles interest you:
SEC Charges Securities Lawyer and Microcap Agent with Fraud (SEC Press Release 2019-130)
“The Securities and Exchange Commission today charged an Arizona-based attorney and a Missouri-based agent of microcap shell companies with securities fraud and registration violations. According to the SEC’s complaint, from February 2015 to April 2017, attorney William Scott Lawler engaged in schemes to fraudulently transfer control over the shares of two publicly-traded shell companies to his client.”
Read more
Former SeaWorld corporate lawyer pleads guilty to insider trading (Weiss)
“A former corporate lawyer for SeaWorld has pleaded guilty to one count of insider trading for buying company stock last summer after learning of yet-to-be-announced increases in attendance and revenue.”
Read more
Securities Settlements in the Shadows (Velikonja)
“The Dodd-Frank Act authorized the Securities and Exchange Commission (“SEC”) to bring almost any enforcement action in an administrative proceeding.
1 Before Dodd-Frank, the SEC could secure civil fines against registered broker-dealers and investment advisers in administrative proceedings, but had to sue in court non-registered firms and individuals, including public companies and executives charged with accounting fraud, or traders charged with insider trading violations. After the Dodd-Frank amendment, save for a few remedies that can only be obtained in court, the SEC can choose the forum in which it prosecutes enforcement actions.”
Read more
Conclusion:
If you enjoy finance and want complex cases, this might be a good area of law for you.