As more investors turn towards the markets to help secure their futures, pay for their children's college, and purchase homes, the need to protect investors becomes stronger than ever. As America's securities exchanges grow into global for-profit entities, the need for sound market regulation increases accordingly.
Becoming an investor is a worthy endeavor that can be very fruitful, but unlike the banking world where one's deposits are guaranteed by the federal government, stocks, bonds and other securities can diminish in value; there simply are no guarantees. This lack of guarantee is one reason that regardless of an investor's education or understanding of the markets, investing is not a spectator sport and sellers of securities must disclose the risks of investing in each security.
The U.S. Securities and Exchange Commission contends that all investors, whether large institutions or private individuals should have access to certain basic facts about an investment before they buy it and as long as they hold that investment. In order for investors to remain "in the know," the SEC requires that public companies disclose important and meaningful financial information to the public. By doing this, it establishes a common pool of knowledge for all investors to share so they can judge for themselves whether or not to buy, sell, or hold a particular security. History has established that only through a steady flow of timely, relevant and comprehensive information, can people make sound investing decisions.
Civil Enforcement Actions & the SEC
The SEC oversees key role players in the securities world, and these include securities exchanges, brokers, dealers, investment advisors, and mutual funds. The SEC is very concerned with the disclosure of important market-related information and protecting investors against fraud. One of the typical infractions includes providing false or misleading information about securities and the companies that issue them.
Each year the SEC brings hundreds of civil enforcement actions against individuals and companies that violate securities laws. One of the major sources relied upon for information by the SEC is the investors themselves, which is another reason why educated investors are so critical to an efficient market.
To illustrate, the SEC charged J.P. Morgan Securities with misleading investors in a complex mortgage securities transaction that occurred just as the housing market started to plummet. In this case, J.P. Morgan agreed to pay $153.6 million in a settlement, which enabled harmed investors to receive all of their money back. (6/21/11 Source: SEC)
Wells Fargo – The SEC charged Wells Fargo's brokerage firm and a former vice president for selling investments that were tied into mortgage-backed securities without disclosing all of the risks to investors and without fully understanding their complexity. Wells Fargo agreed to pay over $6.5 million to settle the charges. (8/4/12 Source: SEC)
Need an Attorney for a Disclosure Case in California?
Has a brokerage firm or other entity failed to adhere to the strict disclosure regulations at your expense? If so, contact a California Securities Fraud attorney from The Law Offices of Jonathan W. Evans & Associates immediately to discuss whether you have grounds to file a suit or arbitration claim to recover your losses.
Since 1975, attorney Evans has litigated hundreds of securities arbitration claims and has tried more than 80 cases to conclusion at FINRA. If you are a victim of securities fraud or any other securities violation, we urge you to contact us to take legal action against the wrongdoer!
Video CenterHelpful information directly from our attorneys.
ArticlesStay informed on the latest securities related issues here!
ResourcesDiscover helpful information that may assist you in your case.