Securities Law in the United States
Securities Law Research
The business of issuing and trading securities is one of the most intensely regulated areas of federal law. Although you can research a securities topic using the standard primary sources of federal law, in most cases you will use specialized print and online tools that present statutes, administrative materials, and cases dealing only with securities law. This guide will focus on researching federal securities law, but it includes a brief section on states securities law. This guide also will focus on specialized sources. If you have access only to the standard sources, consult the Getting Ready for Summer Legal Research Basics guides on Researching Federal and State Statutes, Administrative Law, and Effective Case Law Research.
Federal securities laws seek to protect investors from the great potential for fraud in the securities markets by ensuring that investors have the information they need to make investment decisions. The laws regulate brokers and traders to prevent overreaching in complex markets and also serve an enforcement function, providing sanctions for violations.
If you are unfamiliar with securities law, starting your research by reading something general about the topic in a secondary source focused on securities law is worthwhile (Secondary Sources in Securities). Even if you have some acquaintance with the topic, consulting a guide to securities research, such as this one, can help you zero in on your research task. (For links to additional resoucres, see the section of this entry about Guides to Securities Law Research and Related Topics.)
SECONDARY SOURCES IN SECURITIES LAW
For information about using secondary sources such as law review articles, legal encyclopedias, please see the section about using Secondary Sources here.
The sources below will give you an overview of securities law.
- The Basics: Securities Regulation in a Nutshell. Ratner, David L., and Thomas Lee Hazen.
- A Little More Detail: (see below)
- In-Depth: Securities Regulation. Loss, Louis, and Joel Seligman. The classic multi-volume scholarly treatise, kept up to date with supplements. It is also available on Lexis.
- Other: Another useful source for treatises and similar materials is the Securities Law Reference Books Multibase (PLIREF-SEC) on Westlaw. This includes the combined text of reference books published by the Practising Law Institute (PLI) that are related to securities regulation.
A Little More Detail:
- Fundamentals of Securities Regulation. Loss, Louis, and Joel Seligman. A one-volume condensation of the multi-volume treatise.
- The Law of Securities Regulation. Hazen, Thomas Lee.
- Liability of Attorneys and Accountants for Securities Transactions (Also available on Westlaw). Haft, Robert. J. Annual.
- Understanding the Securities Laws. Soderquist, Larry D. A looseleaf kept up to date with supplements.
There are several periodical indexes that are useful in searching for law review, non-law scholarly journal, and other articles on securities law. The following is a list of useful indexes. Harvard’s subscriptions to these indexes are available for scholarly research only, and not for commercial use.
- Index to Legal Periodicals and Books. The Index to Legal Periodicals & Books (ILP) provides citations to articles in over 800 legal periodicals such as law reviews, bar association journals, yearbooks, institutes, and government publications from August 1981 to the present. In 1994, ILP began indexing legal books and now includes approximately 2,000 per year. Geographical coverage includes the United States, Australia, Canada, and Great Britain.
- LegalTrac provides citations to articles in over 1,000 legal periodicals published since 1980. Geographical coverage includes the U.S., Australia, Canada, Ireland, New Zealand and the United Kingdom. In print and online is called the Current Law Index.
- HeinOnline Law Journal Library provides online, full-text access to a rapidly growing collection of law reviews and journals.
- JSTOR. JSTOR comprises the full-text of more than 200 academic journals covering a very wide range of disciplines. Current volumes for journals that are currently published are embargoed for a period of 1 to 7 years and are unavailable on JSTOR.
- ABI/Inform. ABI/Inform provides citations to articles in over 1,000 academic business, marketing, and management academic journals from 1971. Full-text is available for more than 500 of these publications.
- Factiva.com. Factiva.com is widely known for its coverage of business and financial news and information sources, Factiva also provides access to a significant number of full text legal and law related publications searchable as a group or individually. In addition to recent issues of many law journals, legal newspapers and specialized litigation reporters are particularly noteworthy for their inclusion in this database. The “Legal Publications” group file and the individual titles listed within it can be reached as follows: On the search screen under “Source lookup” click “Factiva Groups.” A “Publications” drop menu will appear. Scroll to “Publications-Types.” “Legal Publications” will then appear in a list under “Select Factiva Group Category.” Click the plus sign to its left to display the individual titles it includes. (Harvard University ID and PIN numbers required.)
- Econlit. Econlit provides citations to articles and other documents related to economics. EconLit indexes articles in over 450 journals as well as books, book reviews, chapters in books, dissertations, and working papers from 1969.
There are many sources available, both online and in print, that can help you keep current with securities law developments. Below is a list of some of them:
- SECLAW.com. News, information and commentary from the self-regulatory agencies, the government, and securities firms and attorneys.
- RealCorporateLawyer.com. SEC Daily Briefs, other regulatory developments, breaking news, and more.
- Annual Institute on Securities Regulation . New York: Practising Law Institute. (available also in Westlaw)
- Bank and Corporate Governance Reporter. Washington, D. C.: Computer Law Reporter, Inc. Monthly. Highlights of this service and also of the Securities Reform Act Litigation Reporter are available.
- Business Lawyer. Chicago: American Bar Association Section on Corporation, Banking, and Mercantile Law. Quarterly. (available also in Lexis and Westlaw)
- Corporate Control Alert. New York: Am-Law Pub. Corp. Monthly.
- Delaware Journal of Corporate Law. Wilmington, Del.: Delaware Law School of Widener College. Semi-annual. (available also in Lexis and Westlaw)
- Emerging Trends in Securities Law. New York: C. Boardman.
- Fordham Journal of Corporate and Financial Law. New York: Fordham University School of Law. (available also in Westlaw and Lexis)
- Insights: The Corporate & Securities Law Advisor. New York: Aspen Law & Business. Monthly. (available also in Lexis)
- National Law Journal. New York: New York Law Publishing Co. Monthly. (available also in Westlaw)
- New York Law Journal. New York: New York Law Publishing Co. Daily. (available also in Westlaw)
- The SEC Today. Washington, D.C.: Washington Service Bureau. Daily announcements and notices of administrative proceedings and other activities.
- Securities Regulation & Law Report. Washington, D.C.: Bureau of National Affairs. Weekly.
Wall Street Journal. New York: Dow Jones. Daily.
Looseleaf services are excellent sources for researching securities law. In addition to pulling together the primary sources of the law, they often provide useful commentary. For general information on looseleaf services and how to use them, see the Georgetown University Law Library Using Looseleaf Services Guide. The following are useful looseleaf services for researching federal securities law:
A leading secondary source in securities law is CCH’s Federal Securities Law Reporter looseleaf. This publication is the most comprehensive, convenient, and widely used commercial source for researching securities law, pulling together the primary sources of the law and providing useful commentary. It includes the Statutes at Large texts of the securities acts, a current set of the securities rules and regulations , a list of all SEC releases, as well as copies of selected releases, no-action letters, interpretive letters, and more.
The electronic version of CCH’s Federal Securities Law Reporter (Non-commercial use only; Harvard ID and Pin required.) Click on “CCH Business & Finance Research Network,” then on “Enter” and then click on the “Securities” tab. This source provides searchable access to CCH’s materials, including laws, regulations, rulings, and CCH analysis. For certain types of documents, the electronic version of this publication includes more than the print version.
Another form of looseleaf is in a stapled, newsletter-like format. Each issue is added sequentially and chronologically to a looseleaf binder. An example is BNA’s Securities Regulation & Law Report. This weekly publication provides selected rules, forms, releases, and cases. It also has a publisher’s summary of securities law developments. It may be the first print appearance, partial or full text, of a proposed regulation, outside of the Federal Register. It also is available in commercial (non-academic) subscriptions to Lexis and Westlaw.
Regulation of Securities: SEC Answer Book uses a question-and-answer format to provide answers to frequently asked questions on securities regulation.
PRIMARY SOURCES OF FEDERAL SECURITIES LAW
This includes the following:
- Acts Governing Federal Securities Law
- Administrative Law
Acts Governing Federal Securities Law
Basic Statutory Law
The basic statutory law governing securities is found in six statutes enacted in the 1930s, subsequently amended, plus two statutes enacted in 1970 and 2002.
- Securities Act of 1933, ch. 38, 48 Stat. 74 (1933) (codified as amended at 15 U.S.C. §§ 77a – 77aa). Regulates initial public offerings of securities.
- Securities Exchange Act of 1934, ch. 404, 48 Stat. 881 (1934) (codified as amended at 15 U.S.C. §§ 78a-78mm). Established the Securities Exchange Commission, authorized it to administer the statutes; regulates trading of securities on the secondary markets and participants in the securities industry.
- Public Utility Holding Company Act of 1935, ch. 687, 49 Stat. 803 (1935) (codified as amended at 15 U.S.C. §§ 79-79z-6). Regulates electric utility and natural gas holding companies.
- Trust Indenture Act of 1939, ch. 411, 53 Stat. 1149 (1939) (codified as amended at 15 U.S.C. §§ 77aaa-77bbbb). Protects holders of debt securities covered by indentures.
- Investment Company Act of 1940, ch. 686, title I, 54 Stat. 789 (1940) (codified as amended at 15 U.S.C. §§ 80a-1 – 80a-64). Regulates mutual funds and other investment companies investing and trading in securities issued by other companies.
- Investment Advisers Act of 1940, ch. 686, title II, 54 Stat. 847(1940) (codified as amended at 15 U.S.C. §§ 80b-1-80b-21). Provides for registration and regulation of investment advisers.
Securities Investor Protection Act of 1970, Pub. L. No. 91-598, 84 Stat.1636 (codified as amended at 15 U.S.C. §§ 78aaa-78lll). Established Securities Investor Protection Corporation (SIPC) to oversee liquidation of securities firms in financial trouble and to arrange for the payment of the claims of individual investors against failed broker-dealers.
- Public Company Accounting Reform and Corporate Responsibility Act of 2002 (“Sarbanes-Oxley Act”), Pub. L. No. 107-204, 116 Stat. 745, codified at 15 U.S.C. §§ 7201 and other sections in 15 U.S.C. and 18 U.S.C. Both amended the Exchange Act and enacted new provisions, including establishing an independent accounting oversight board charged with setting auditing standards and with investigating and disciplining public accounting firms.
Please see the Finding the Securities Acts section for more information.
There are compiled legislative histories of the securities acts. If it is necessary to compile one yourself, please see our entry on researching Legislative History.
Print Sources of Legislative Histories of the Securities Acts include:
- Legislative History of the Securities Act of 1933 and Securities Exchange Act of 1934
- Federal Securities Laws: Legislative History, 1933-1982.
- Federal Securities Laws: Legislative History, 1983-1987. Supplement.
- Federal Securities Laws: Legislative History, 1987-1990. Supplement
Electronic Sources of Legislative Histories of the Securities Acts in Lexis:
- House and Senate Committee Reports of the 1933 and 1934 Acts (FEDSEC; LEGIS)
- US – CIS Legislative Histories – Securities Law (FEDSEC; CISLH)
Electronic Sources of Legislative Histories of the Securities Acts in Westlaw:
- Federal Securities – Legislative History (FSEC-LH)
- Arnold & Porter Sarbanes-Oxley Act of 2002 (SAROX-LH)
- Arnold & Porter Legislative History: Insider Trading Act (INSIDER-LH)
Note: Be sure to check the currency, coverage, and status (official or unofficial) of all sources.
A significant amount of securities law is administrative, emanating from the Securities Exchange Commission (SEC). The Securities Exchange Act of 1934 established the SEC, an independent agency to administer and enforce the federal securities statutes. Like other administrative agencies, the SEC issues detailed regulations and other pronouncements with the force of law to flesh out the statutes on a practical level.
General Information About the SEC
The Commission has five members appointed by the President for five-year terms. No more than three members can belong to the same political party. The SEC’s headquarters are in Washington, D.C., with regional and district offices in financial centers around the country. A professional staff largely conducts day-to-day administration of the Commission.
The SEC has an excellent website, with a section called About the SEC, that is the a great source of information about the Commission’s goals and functions. Other sources of information about the SEC include:
- Federal Regulatory Directory
- United States Government Manual – print copy or available online through the U.S. Government Printing Office
The SEC issues numerous types of documents, including regulations, interpretive releases, no-action letters, and others, which vary in the degree to which they carry the force of law. For more information on the different kinds of issuances, see the SEC website. Below is a list of selected types of SEC issuances.
- Rules (Regulations) – An oddity of securities law nomenclature is the use of the term “rule” to apply to what is more typically called a regulation in other areas of administrative law. In some instances, a group of securities rules comprise a regulation. The SEC promulgates rules under one or another of the securities acts. More information on Finding Securities Rules/Regulations.
- Releases – The SEC issues virtually all of its regulatory pronouncements, including rules, administrative decisions, orders, notices, various forms of guidance and interpretation, and other information, in the form of releases. The SEC issues its releases under one of the securities acts, numbering the releases with a prefix identifying the Act. See examples below:
- Release No. 33-8501 – Securities Offering Reform issued under the 1933 Act
- Release No. IC-2664 – Definition of Eligible Portfolio Company issued under the Investment Company Act of 1940
There are several specialized categories of releases. Below are selected popular types:
- Interpretive Releases – The Commission occasionally issues releases stating its views on the meaning of securities laws and regulations to provide guidance on topics of interest to the business and investment communities. More information on Finding Interpretive Releases.
- Litigation Releases – The SEC issues descriptions of proceedings in its civil suits in the federal courts and of selected criminal proceedings. More information on Finding Litigation Releases.
- Concept Releases – On occasion, before issuing a proposed rule, the Commission will issue a concept release inviting comment from the public on whether regulation is appropriate in a certain situation and if so, about the regulatory approach it should take. More information on Finding Concept Releases.
- No-Action Letters – The staff of the SEC issues No-Action letters in response to the private requests of individual entities asking whether certain transactions can be conducted legally in the manner they describe. These pronouncements are called “No-Action” because the SEC’s letter customarily states that “the staff will recommend no action to the Commission” if the transaction is done in the specified manner. Because they represent the views of the staff, they are not legally binding. More information on finding No-Action Letters.
- Policy statements – The SEC sometimes publishes policy statements in which the Commission clarifies its positions on certain matters. More information on finding Policy Statements.
- Forms – The SEC also publishes forms for the various statements and reports that the Acts require. Forms have the legal force of rules and play an important part in defining the extent of disclosure obligations. Forms are published in the Federal Register, but unlike rules, are not included in the C.F.R. More information on the types of forms and on Finding Forms.
The federal securities laws reserve an important role for self-regulation by industry and professional groups, with oversight by the SEC. The stock exchanges (including NYSE, NSX, AMEX and many more) regulate the activities of members, subject to SEC oversight.
SEC authorized the establishment of the National Association of Securities Dealers (NASD) and Municipal Securities Rulemaking Board (MSRB) for self-regulation of over-the-counter securities dealers and municipal securities dealers.
More information on Finding Self-Regulation Materials.
Enforcement Actions: Litigation
The SEC has an enforcement staff that investigates possible violations of the securities laws. (You can find additional information about enforcement on the SEC Division of Enforcement webpage.) If investigations result in civil charges, the party or parties charged may settle the case. If the charged parties contest the charges, the Commission’s enforcement staff may prosecute civil suits in either its own quasi-judicial administrative proceedings or in the federal courts. In cases of particularly egregious violations, the SEC may refer a matter to the Department of Justice or other criminal law enforcement agency for prosecution as a criminal violation of the securities laws.
This section about Enforcement Actions include:
- Administrative Proceedings
- SEC Enforcement Actions in the Federal Courts
Initial decisions: In administrative adjudications, independent administrative law judges (ALJs) issue decisions containing findings of fact, conclusions of law, and recommendations for sanctions in the proceedings before them. Parties may appeal initial decisions to the Commission.
Commission opinions: The Commission hears appeals from initial decisions and from disciplinary decisions issued by the self-regulatory agencies, and issues opinions and orders. Commission decisions may be appealed to the U.S. Courts of Appeals. See Finding Enforcement Materials.
You may also want to see Finding Litigation Releases.
SEC Enforcement Actions in the Federal Courts
In civil suits, the SEC typically seeks the following results:
- injunctions against future violations;
- money damages and the disgorgement of illegal profits;
to bar or suspend individuals from acting as corporate officers or directors.
In a particularly egregious case, the SEC may refer a matter to the Department of Justice for prosecution as a criminal violation of the securities laws. Federal securities law cases are decided in the federal courts.
FILINGS (Registration Statements, Reports, Etc.)
SEC’s EDGAR System – Electronic Data Gathering, Analysis, and Retrieval system
All companies, both foreign and domestic, are required to file registration statements, periodic reports, and other forms electronically through SEC’s EDGAR system. Note that not all documents are available on EDGAR. (For more information on availability of documents on EDGAR, and on EDGAR in general, see About EDGAR.)
EDGAR provides a wealth of information. Some of the particularly useful capabilities are the following:
- Search the EDGAR Database – From this page you can search for companies and other filers, use a special “latest filings” search, search the historical EDGAR archives (which have some materials dating back to 1993), look up Central Index Key (CIK) numbers, retrieve filings made on EDGAR in the past week, and view prospectuses and other “485” forms.
- Information on Forms – The EDGAR website has a page that describes the form types used for electronic filing on EDGAR. This page includes some extremely useful tables that briefly describe the different filing types. You can also view an SEC forms list that provides links to PDF versions of SEC public forms and many of the rules, regulations, and schedules associated with these forms.
- Other EDGAR Information – In addition, there is an EDGAR tutorial and information specifically for people filing with EDGAR.
Please see the EDGAR homepage for links to additional information.
Other Sources of Information on Filings
Lexis and Westlaw also provide access to SEC filings information through some of their databases. Below is a list of some of those databases. For more information on the coverage of the databases listed in this section, see the Westlaw and Lexis database descriptions.
Lexis databases include:
- SEC Filings – Full-Text & Abstracts – (COMPNY; SEC)
- EDGARPlus(R) Database – (COMPNY; EDGARP)
- SEC EDGARPlus Exhibits – (COMPNY; EXIBIT)
Westlaw Databases include EDGAR – S.E.C. Filings – (EDGAR)
In addition, there are some free web sites that provide access to text of some filings:
- SEC Info
- Annual Reports Library
- Virtual Chase: Company Info
- Business Filings Databases
Note: Be sure to check the currency, coverage, and status (official or unofficial) of all sources.
STATE SECURITIES LAWS
General Information on State Securities Laws (“Blue Sky” Laws)
Securities regulation existed at the state level before federal regulation began with the 1933 Securities Act. Securities transactions remain subject to regulation under both state and federal law, so it may be necessary to research state law as well as federal.
States are largely free to duplicate or to supplement federal requirements as long as their provisions do not conflict with federal law. State securities laws are commonly known as “blue sky” laws, to protect investors from “speculative schemes which have no more basis than so many feet of blue sky.” Hall v. Geiger-Jones Co., 242 U.S. 539, 550 (1917) (interpreting Ohio blue sky law). It is important to remember that state law may be involved in any aspect of securities business and in any kind of securities transaction and to conduct your research accordingly.
In 2002, the National Conference of Commissioners on Uniform State Laws promulgated a new revision of the Uniform Securities Act, complementing federal law to provide protection for investors in securities that are not covered by the federal securities laws. For a summary, click here. The standard print source for uniform laws, including this one, is Uniform Laws Annotated.
As of February 2005, six states and the U.S. Virgin Islands have enacted the 2002 revision; four others have 2005 bills at some point in the legislative process. Although nearly 40 states had enacted the 1956 Uniform Act or the 1985 revision, the language and interpretation of state securities laws remain different from state to state. You can check the status of the Uniform Securities Act in the states on the NCCUSL Acts and Legislation page (select the Securities Act from the pull-down menu, click search, and then click on “legislative fact sheet”).
Sources of State Securities Information
Blue Sky Law Reporter. CCH. This is a looseleaf service containing the published statutes, administrative decisions, and court reports of each state.
Introduction to the Blue Sky Laws (seclaw.com). This is an online publication that provides an introduction to the area.
GUIDES TO SECURITIES LAW RESEARCH AND RELATED TOPICS
Print Research Guides
Specialized Legal Research. Chanin, Leah F. The chapter on securities regulation by Kay M. Todd has solid research guidance and excellent tables of Release and Rule Designations.
Securities Law Research Web Guides and Resources
- Cornell LII: Securities Law
- FindLaw Securities Law Practice Area
- Georgetown University Law Center Library: Securities Law Research
- New York University School of Law Library Securities Law Research Guide
- Northern California Association of Law Libraries: Securities/Corporate Resources
- Securities Law and Compliance Center
- University of Cincinnati School of Law: Securities Lawyer’s Deskbook
- The Virtual Chase: Securities Law
Securities Law and the Constitution
United States Constitution
According to the Encyclopedia of the American Constitution, about its article titled SECURITIES LAW AND THE CONSTITUTION, following the 1929 stockmarket crash and the ensuing economic depression, Congress enacted the Securities Act of 1933 and the Securities Exchange Act of 1934 to restore investor confidence and provide for more efficient securities markets.
Securities Law and Corporate Law
This section provides basic coverage of Securities Law in relation to U.S. state and federal corporate law. For comprehensive coverage, please visit the main entry.
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