Securities Law

What Columbus Securities Lawyers Do

A Columbus securities lawyer helps clients navigate the rules governing the sale of ownership interests in a company. There are various circumstances when the requirements of securities law apply, and various circumstances when those laws do not apply. In general, securities law applies when securities are being offer for sale across multiple states, to unqualified investors, or during an initial public offering. Qualified investors includes people with a certain amount of annual income (above $200,000), qualified financial institutions, and investment companies like mutual funds. When securities law applies, the law requires companies to make certain information available through disclosures. Disclosures to potential investors primarily include the financial position of the company selling their securities and the risks related to the company and the investment. This is done through a document called a prospectus, which must be made available to potential investors to investigate.


The burden of disclosures does not stop at the prospectus. There are also disclosures to the SEC, which are typically who holds shares of the company and how many shares are registered. The initial disclosure, called a registration statement, must be made to the SEC before any shares can be sold in a transaction where securities law applies. Selling unregistered shares can have a catastrophic effect on a company, including legal liability and large monetary fines.


Once a company is registered with the SEC, they must continue to update the information available to investors and the SEC in continuing disclosures. The company must keep the information made in previous disclosures up to date in disclosures including annual, quarterly, and transaction specific disclosures. The annual and quarterly disclosures are mainly to keep the financial position of the company up to date and accurate for the investors and shareholders. The transaction specific disclosures are disclosures of when a person buys a certain amount of shares in the company. This can indicate if someone is trying to gain a controlling interest in the company, and the transaction must be disclosed to the SEC.


Although these disclosures may seem simple, they have many technical requirements that must be met before they will be accepted by the SEC. There is a list of over 30 items that must be included on a registration statement, and the main concern is the analysis of risk factors for the company. This is a concern because it is a vague requirement. Anything could be a potential risk factor for a company, and the requirement generally results in an extensive list of possible risk factors. The list of required items, along with the risk factors, result in documents upwards of 100 pages.


A potential workaround to the extensiveness of the document is trial and error; submitting smaller documents to the SEC and gradually including more information as the SEC denies the document and includes notes on why the document is denied. The problem with this is the same reason why these documents tend to be so extensive: the SEC will prevent your company from resubmitting the document for 180 days if it is denied. Fortunately, the SEC allows companies 1 submission for review and not for approval. This allows you to draft your registration statement and see what it's missing without it being denied and losing 180 days of time. These rules and penalties are just further proof of how important documents relating to securities are and how necessary it is to have a securities lawyer help you get them right.

Why You Need Help

The rules revolving around the sale of a security are highly complicated. Figuring out if the rules even apply can be difficult enough. After that, you must draft other important documents such as a prospectus, registration statement, or a disclosure. These documents are highly important and can have dire effects. An improper registration statement can prevent your company from being able to go public for a certain amount of time. An improper prospectus or disclosure to investors can result in a company being liable for fraud and losing millions of dollars. These documents cannot be taken lightly and need to be drafted by a securities lawyer.

Why Work With Collier Legal, LLC

At Collier Legal, LLC our Columbus securities lawyers know the importance of the work we do. We want to protect you from losing months of time and millions of dollars, and we want you to be able to sell your securities without fear. That's why we work tirelessly to draft documents that comply with the law. We also understand the importance of company deadlines. We do quality work that meets your deadlines so that you look good for choosing our firm. We want your company to continue to grow, not be stifled by the complications of securities law. For more information, or to schedule a consultation today, contact one of our Columbus Securities Lawyers.

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