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Investor Education

Secondary Liability of Agents, Employees, Managers and Executive Officers Under State Securities Laws

Secondary Liability of Agents, Employees, Managers and Executive Officers Under State Securities Laws

The securities laws in most States, including States that have adopted the Uniform Securities Act (2002) (“USA”), provide for civil causes of action against the agents, employees, managers, and executive officers of primary violators of the securities laws. This type of liability is often referred to as secondary liability. The Liability of…

My Financial Adviser Has Filed For Bankruptcy: Now What?

My Financial Adviser Has Filed For Bankruptcy: Now What?

In the wake of several large Ponzi schemes collapsing in 2017 and 2018, a growing number of financial advisers who steered clients towards these schemes are seeking bankruptcy protection. Fortunately, affected investors have the option of filing “nondischargeability” claims in the bankruptcy proceedings to prevent their financial advisers from escaping liability for “securities law violations,” including the sale of unregistered securities. The pertinent…

Secondary Liability of Financial Advisers for Materially Aiding the Sale of Unregistered Non-Exempt Securities Under the Uniform Securities Act (2002)

Secondary Liability of Financial Advisers for Materially Aiding the Sale of Unregistered Non-Exempt Securities Under the Uniform Securities Act (2002)

Subsection 509(2) of the Uniform Securities Act (2002) (the “USA”) provides the purchaser of an unregistered non-exempt security with a cause of action against the seller of the security. [1] Subsection 509(8)(d) of the USA provides the purchaser of an unregistered non-exempt security with a cause of action against a broker-dealer,…