Securities Law: A Fresh Look at the Power of Regulation


by | Mar 12, 2019

Securities Law Legislations

Securities law has been regulated quite a bit with the Sarbanes-Oxley Act. This includes the underlying acts of the 1933 and 1934 older acts and FINRA. Then we can’t forget about the state Blue Sky Laws that govern securities regulation.

So there are plenty of laws on the book. The shortcoming has been enforcement of those laws, or the ability to enforce those laws. A large part of that is due to the lack of resources with respect to the SEC or the state agencies. Another problem is securities violations often don’t go to a courtroom. They don’t get adjudicated because there are not enough resources to address violations.

Securities Law Violations

You hear about public violations of Sarbanes-Oxley. There are public matters that are important and quintessential toward building public trust. But you don’t hear about private offering fraud, and there’s a lot of that out there. Keep in mind, I’m often on the defense of those actions, so I don’t say that out of hand. Those allegations are serious. But there’s a lot of them out there that don’t get to see a courtroom or aren’t adjudicated enough.

Here’s an example. There’s a FINRA arbitration proceeding. Or it could be an SEC proceeding because there’s a lack of resources. There’s not enough in the ability to prosecute the current laws on the books. That’s far from me saying that the laws on the books are more than enough. It’s not that they are over-regulatory in certain instances. But real the shortcoming is the ability to enforce those laws.

The Current Securities Market

Securities markets are very well regulated. The securities laws give regulators the ability to police and track compliance. This is whether they are at the federal level at the SEC or the state level regulators. So there’s yet to be the need for a new commission at this point and time. Everyone’s watching the economy to see where the economy’s gonna go. If we’ll have a 2008 again, for example, and a meltdown. Quite a bit ensued from that meltdown, we had Sarbanes-Oxley. We had a bunch of reforms in our securities and our banking system as a whole. We don’t want to stifle growth or innovation. But we do want to encourage is more enforcement actions of actual, proven violations of law.

Securities Law

The 2008 crash was an interesting phenomenon. And there were many contributing factors in my view. There were shortcomings on regulations of banks and securities in general. Alongside that, there was some recklessness on the part of institutions. To be frank, there was some recklessness on the part of the borrowers. It was a perfect storm of catastrophic events, which led to a meltdown. So in my view, regulation is great. We have enough regulation on the books as of now.

Improving Securities Law

What we need most is to better police and enforce proven breaches of violations of law. This is also needed on the consumer level. By consumer I mean even includes a business owner for example. We have to be more responsible and more efficient with the resources we have. We need to ensure that we don’t overextend ourselves or there’s not over-leveraging. Banks now have a different appreciation and understanding of the leveraging process. They have a different understanding and appreciation for the underwriting process. It’s different in how they do their job the way they should be doing it.


  • Ismail Amin

    Ismail’s legal experience encompasses serving Fortune 500 companies, mid-sized privately held companies, and entrepreneurs. He presently serves as Corporate and Litigation Counsel to large and mid-sized businesses throughout California, Nevada, Texas, North Carolina, and New York as well as General and Personal Counsel to high-profile hospitality operators in California and Nevada. Ismail’s practice emphasizes Business and Intellectual Property matters, with a focus on healthcare, biopharmaceuticals, biotechnology, and hospitality. Ismail has counseled the firm’s healthcare provider clients in acquiring or selling assets while maximizing return and minimizing risk. He has helped clients acquire or sell over $1 billion worth of healthcare-related assets, including hospitals.