Before the stock market crashed in 1929, there were not many established rules with regards to the reporting of financial business information.  This meant that investors were often unaware of the stability or risk of their investment. After Black Tuesday, federal security laws were developed in order to regulate and protect investors. At the federal level securities and all they entail are regulated by the Securities and Exchange Commission, more commonly known as the SEC.  As the market grew, state regulations were also developed.  Here in Indiana, securities where the total assets are less than 25 million are regulated by the Indiana Securities Division. While necessary to ensure accurate reporting of information, the myriad of regulations at both the state and federal level can be intricate and difficult to navigate.

Whether you are choosing to be an advisor or a registered representative, you must apply for and receive a securities license.  Generally, you must be licensed at both the federal and the state level. There are several different categories, or types of securities licenses.  The specific one needed depends on several different factors.  The Financial Industry Regulation Authority (FINRA), the North American Securities Administration (NASAA), and the National Futures Association are the three organizations that regulate and issue the examinations needed for securities licensing at the federal level, and the Indiana Securities Division is responsible for licensing at the state level.   The licenses themselves are generally separated into two groups.  The first being the Registered Representative Level, and the second being the Registered Principal Level.

The Registered Representative Level

These licenses would include or cover an individual who works for a brokerage company.  The individual would ultimately be acting as an account representative, trading investment products such as stocks for a client while employed by a company that is licensed by the SEC.

There are twenty nine separate licenses that fall under the purview of the Registered Representative Level, with three of those being the licenses that are generally obtained by representatives and advisors.

Those are:

Series 3-National Exchange Exam

Series 6- Investment Company and Variable Contracts Exam

Series 7- General Securities Representative Exam

The Registered Principal Level

Refers to a licensed dealer who also has the ability to oversee and supervise operational compliance, basic trading and sales operations and the personnel.  A registered principal must first obtain the basic securities license for the specific operation they oversee in addition to the principal license for that operation.

There are also fourteen licenses that fall under the purview of the Registered Principal Level.

The licensing process can be daunting with a total of forty three licenses available for both representative and broker.  The license needed can vary due to several mitigating factors such as the method of compensation, type of investment, and the general range or scope of the services that you intend to provide.  The attorneys at Duepner Law can help you through the process of obtaining your securities license and ensure that you are set up for success in your new venture.  Contact us today to set up an appointment to discuss your concerns or questions.

Securities Fraud and other Violations 

As outlined in the paragraphs above there are strict licensing requirements with regards to the brokerage and advisement of securities.  Some of the licenses only vary by small degrees. There are potentially many ways to miss a step or to venture into a category or investment type that does not fall under the purview of a particular license.

If you work for a financial and investment company, more than likely they had a licensing program included in training that ensured you were properly licensed.  This measure does not exist if you have chosen to go into business for yourself.  It’s possible to be unsure of which license is needed in a specific situation and this can leave a potentially devastating margin for error.

In 2011, two registered representatives who worked for a large company faced legal ramification for their actions.  The two representatives were accused of selling phony promissory notes.  They allegedly led purchasers to believe that the notes were backed by life settlements.  One aspect of the case was that the two representatives were not properly licensed for the transaction.  The other was they allegedly willing mislead the purchasers about what they were buying.

In cases such as that one, and any other that involves securities, the accused can face a multitude of charges.  Examples of violations are:

• Misrepresentation or omission of important information about securities
• Failure to Supervise
• Stealing another’s funds or the securities themselves
• Insider TradingA person accused of a securities violation can be held accountable via three different avenues. Those would be separated into administrative, civil, and criminal.

• Administrative- Administrative charges, or actions are those brought directly by the Securities and Exchange Commission or the Indiana Securities Division and are handled within the organizations themselves.   Through an Administrative proceeding, the SEC or Indiana Securities Commission can seek sanctions from an administrative law judge. This judge is independent from the Commission itself, and the proceeding is not considered either civil or criminal. Administrative sanctions can include suspension of licensing, cease and desist orders, monetary penalties, and bars from any further association with the securities industry.

• Criminal- Potential criminal charges arise if it can be proven that a violation of SEC or Indiana Securities Laws, rules and regulations occurred willfully. This means that the actions themselves show an intent to break the law.

• Civil- If a violation is pursued at the civil level, the SEC files a complaint with a U.S. District Court and request that the court provide a remedy or sanction. In most cases, a request is made for an injunction that prohibits any further acts. Especially those believed to be in violation of the law or Commission rules. An injunction can be accompanied by audits, or supervisory arrangements. As with administrative charges, civil charges can also result in monetary penalties as well as barring an individual from serving as a corporate officer.

Any violation of the intricate SEC regulations is serious and should be treated as such.  If you have found yourself in the tenuous position of being accused of a securities violation, contact Duepner Law so that we can discuss your case and ensure that your rights are protected.  Duepner Law can also advise as to your current or future business model to ensure Laws are being followed.

Before the stock market crashed in 1929, there were not many established rules with regards to the reporting of financial business information. This meant that investors were often unaware of the stability or risk of their investment. After Black Tuesday, federal security laws were developed in order to regulate and protect investors. At the federal level securities and all they entail are regulated by the Securities and Exchange Commission, more commonly known as the SEC. As the market grew, state regulations were also developed. Here in Indiana, securities where the total assets are less than 25 million are regulated by the Indiana Securities Division. While necessary to ensure accurate reporting of information, the myriad of regulations at both the state and federal level can be intricate and difficult to navigate.

Whether you are choosing to be an advisor or a registered representative, you must apply for and receive a securities license. Generally, you must be licensed at both the federal and the state level. There are several different categories, or types of securities licenses. The specific one needed depends on several different factors. The Financial Industry Regulation Authority (FINRA), the North American Securities Administration (NASAA), and the National Futures Association are the three organizations that regulate and issue the examinations needed for securities licensing at the federal level, and the Indiana Securities Division is responsible for licensing at the state level. The licenses themselves are generally separated into two groups. The first being the Registered Representative Level, and the second being the Registered Principal Level.

The Registered Representative Level

These licenses would include or cover an individual who works for a brokerage company. The individual would ultimately be acting as an account representative, trading investment products such as stocks for a client while employed by a company that is licensed by the SEC.

There are twenty nine separate licenses that fall under the purview of the Registered Representative Level, with three of those being the licenses that are generally obtained by representatives and advisors.Stock Market 3D cube Word Cloud Concept

Those are:

• Series 3-National Exchange Exam
• Series 6- Investment Company and Variable Contracts Exam
• Series 7- General Securities Representative Exam
• The Registered Principal Level

Refers to a licensed dealer who also has the ability to oversee and supervise operational compliance, basic trading and sales operations and the personnel. A registered principal must first obtain the basic securities license for the specific operation they oversee in addition to the principal license for that operation.

There are also fourteen licenses that fall under the purview of the Registered Principal Level.

The licensing process can be daunting with a total of forty three licenses available for both representative and broker. The license needed can vary due to several mitigating factors such as the method of compensation, type of investment, and the general range or scope of the services that you intend to provide. The attorneys at Duepner Law can help you through the process of obtaining your securities license and ensure that you are set up for success in your new venture. Contact us today to set up an appointment to discuss your concerns or questions.

Securities Fraud and other Violations

As outlined in the paragraphs above there are strict licensing requirements with regards to the brokerage and advisement of securities. Some of the licenses only vary by small degrees. There are potentially many ways to miss a step or to venture into a category or investment type that does not fall under the purview of a particular license.

If you work for a financial and investment company, more than likely they had a licensing program included in training that ensured you were properly licensed. This measure does not exist if you have chosen to go into business for yourself. It’s possible to be unsure of which license is needed in a specific situation and this can leave a potentially devastating margin for error.

In 2011, two registered representatives who worked for a large company faced legal ramification for their actions. The two representatives were accused of selling phony promissory notes. They allegedly led purchasers to believe that the notes were backed by life settlements. One aspect of the case was that the two representatives were not properly licensed for the transaction. The other was they allegedly willing mislead the purchasers about what they were buying.

In cases such as that one, and any other that involves securities, the accused can face a multitude of charges. Examples of violations are:

• Misrepresentation or omission of important information about securities
• Failure to Supervise
• Stealing another’s funds or the securities themselves
• Insider TradingA person accused of a securities violation can be held accountable via three different avenues. Those would be separated into administrative, civil, and criminal.

Administrative- Administrative charges, or actions are those brought directly by the Securities and Exchange Commission or the Indiana Securities Division and are handled within the organizations themselves. Through an Administrative proceeding, the SEC or Indiana Securities Commission can seek sanctions from an administrative law judge. This judge is independent from the Commission itself, and the proceeding is not considered either civil or criminal. Administrative sanctions can include suspension of licensing, cease and desist orders, monetary penalties, and bars from any further association with the securities industry.

Criminal- Potential criminal charges arise if it can be proven that a violation of SEC or Indiana Securities Laws, rules and regulations occurred willfully. This means that the actions themselves show an intent to break the law.

Civil- If a violation is pursued at the civil level, the SEC files a complaint with a U.S. District Court and request that the court provide a remedy or sanction. In most cases, a request is made for an injunction that prohibits any further acts. Especially those believed to be in violation of the law or Commission rules. An injunction can be accompanied by audits, or supervisory arrangements. As with administrative charges, civil charges can also result in monetary penalties as well as barring an individual from serving as a corporate officer.

Any violation of the intricate SEC regulations is serious and should be treated as such. If you have found yourself in the tenuous position of being accused of a securities violation, contact Duepner Law so that we can discuss your case and ensure that your rights are protected. Duepner Law can also advise as to your current or future business model to ensure laws are being followed.