What Does a Securities Attorney Do for Investors And Brokers?

Securities attorney

Securities lawyers practice in a very specialized field. Hiring a securities attorney with experience and expertise in investor rights and regulations is essential. Securities attorney conduct everything from facilitating major deals like initial public offerings to investigating shady shenanigans that cause investors massive losses. They can sue stock brokers and companies for negligence, mismanagement, fraud or breach of fiduciary duty.

Due Diligence

Due diligence is researching information to make a wise and informed decision. For investors, a securities lawyer can provide due diligence in connection with a new investment by reviewing publicly available information regarding the company being invested in, explaining the disclosure documents that must be provided to prospective investors; and researching lawsuits and claims against management and the company. A securities lawyer can also assist in resolving a dispute with an investment professional through the Financial Industry Regulatory Authority (FINRA) arbitration program. Arbitration offers a quick, cost-effective alternative to litigation and a binding award that cannot be appealed. Securities lawyers can help investors and brokerage firms prepare and file a Statement of Claim, respond to a statement of claim, attend pre-hearing conferences, participate in discovery, and argue a case at an arbitration hearing.

Whether advising companies wishing to go public, ensuring compliance with securities regulations, or tackling the paperwork involved in private placements and stock offerings, securities lawyers are essential to how our nation’s capital markets function. When corporate greed knows no bounds and shareholders are burned, a skilled securities attorney is a client’s best ally in seeking justice and recovering their losses. You must seek legal representation immediately when you suffer monetary damages due to your broker’s negligence or misconduct. An experienced lawyer at Kurta Law Firm can determine the best course of action to take in bringing a FINRA arbitration or civil litigation claim against your broker, financial advisor or investment firm.

Representation in FINRA Arbitration

While it is impossible to prevent all investment losses completely, securities lawyers can help clients recover the most money possible from brokerage firms and stock brokers that engage in misconduct. They can assist with securities litigation involving class actions, FINRA arbitration, and state and federal court lawsuits. A securities attorney must know the laws and regulations for investing and trading stocks, options, and other securities. They must understand who regulates which types of securities, how specific situations typically unfold, and keep up with regulatory changes. Many brokerage firms require new investors to sign arbitration agreements preventing them from filing a civil suit for lost investments. FINRA arbitration is a pseudo-judicial process that involves the submission of documents, discovery and pre-hearing conferences, and a hearing with an arbitrator or panel. During this process, a securities lawyer will review and analyze your case to determine the compensation you are entitled to receive.

Securities lawyers can also advise clients about the laws and procedures for investing with startups and other emerging companies. They can help them understand how federal and state securities laws apply to equity crowdfunding, SAFE agreements (Simple Agreements for Future Equity), convertible notes, and friends and family financing. They can also help clients adhere to these rules by preparing and reviewing securities-related contracts and documentation.


Securities lawyers provide a crucial service to investors seeking compensation for investment losses and financial professionals seeking guidance on regulatory compliance. This specialized area of law is highly regulated, so attorneys working in this field must understand who holds which types of securities, how specific situations typically unfold, and stay current on regulatory changes to advise clients adequately. Securities law encompasses various legal issues, from investor-broker disputes to large corporate mergers and acquisition deals. In addition, securities lawyers often help companies navigate the process of going public and raising capital through private placements, advising them on ensuring they comply with securities laws to avoid being subject to a regulatory investigation or civil litigation by the Securities and Exchange Commission (SEC).

When brokers or brokerage firms violate securities laws, a securities lawyer can file a civil lawsuit against the offending party to recover damages for their client. In these cases, a securities lawyer can evaluate whether the brokerage firm failed to perform its due diligence on the products it sold and whether the broker committed fraud or negligence by recommending a bad investment. Securities lawyers can also help clients burned by a fraudulent or mishandled stock trading account file individual claims against their brokerage firm and brokers responsible for their losses.


Securities lawyers work to maintain compliance with a myriad of laws and industry regulations. Whether they are representing individual investors pursuing compensation for investment losses or working to defend brokers and financial firms from securities fraud claims, they are a critical resource for the entire field. For example, when an investor finds that their stock portfolio has been decimated despite management and shady stock brokers’ assurances that the investments were safe, securities lawyers spring into action to determine whether any fraud or negligence was involved. These losses could result from market forces beyond management and brokers’ control or from fraud, negligence, mismanagement, and other misconduct that allows investors to seek damages in court actions or arbitration proceedings overseen by the Securities and Exchange Commission.

On a larger scale, securities attorneys facilitate major deals by navigating voluminous contracts and paperwork on private placements and share offerings. They also work to thwart insider trading and other shady shenanigans by companies looking to raise millions in capital from the public. In addition, many broker-dealers have their customers sign arbitration agreements that preclude a lawsuit in court and require them to resolve disputes through the Financial Industry Regulatory Authority’s arbitration system. These arbitration hearings are quasi-judicial and handled by private arbitrators who make binding decisions like a judge in a public courtroom.