Business & Corporate Law
Securities Arbitration & Investor Issues
Corporations are some of the most common corporate entities to be formed each year throughout the state of Virginia. While each form of corporate entity offers different benefits to members, corporations allow its members, or shareholders, to own a portion of the company through stock offerings. However, both small and large companies are subject to strict scrutiny regarding all shares, and the company can be in severe legal trouble thanks to the actions of a few shareholders or directors. Additionally, if you are seeking to invest in a company, you need to be aware of any underlying issues with the company. If you or your company are facing legal disputes based on director actions, or if you have invested in a company based on fabrications, contact an experienced business law attorney.
Investor Issues and Securities Issues
Corporations have made up the backbone of the American economy for a number of years, although not without their own struggles. Insider trading and other white collar crimes led to the implementation of the Securities and Exchange Commission to prevent future crimes from occurring. However, as corporations and their technologies evolve, white collar crimes have taken on new forms of implementation, and other new corporate improprieties have occurred. Investors now have to research thoroughly into a company to ensure they are purchasing the stock they believe they are purchasing, and corporations themselves need to be adamant about following all director and shareholder actions.
Corporate agreements and contracts exist to let each party understand their own obligations. Corporate bylaws specifically lay out the duties of directors and shareholders within a corporation. If either party breaches these specific fiduciary duties, they can be subject to legal consequences and responsible for the financial repercussions of their actions. On the other hand, if an investor is misled into investing into a company based on fabricated financial numbers, the company may be responsible for any financial harm that occurs to the investor.
Common issues in this realm of corporate law include:
- The failure of a broker or advisor to take into account an investor’s particular situation and needs
- A broker who engages in excessive trading to artificially inflate commissions
- Failure to follow the investor’s orders
- Failure to respond to changing market conditions
- Fraud on the part of stockbrokers or investment advisors