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Corporate Securities Attorney


While we often think of securities in the context of large, global corporations, the issuance of corporate securities can be an important way for entrepreneurs to raise capital for their company. Issuing bonds or other forms of equity can be a way to finance growth and innovation.

That said, securities law is extremely complex, with broad reporting, risk, and compliance implications. Businesses of all sizes should work closely with a corporate securities attorney as part of their financial strategy.

What Is Securities Law?

Generally speaking, securities laws are the laws and regulations governing financial instruments like stocks, bonds, and mutual funds. These laws are designed to prevent fraud and market manipulation while promoting compliance and enforcement.

Securities laws broadly apply to two different groups of stakeholders:

Shareholders and Investors

Securities laws protect investors and shareholders from fraud and abuse. Investors are entitled to full disclosure regarding corporate operations and governance, finances, and transactions, as well as potential risks for their investment. When shareholders are defrauded, either by corporate abuses or by brokers and dealers, they can take legal action to recover their losses.

Corporations and Businesses

When a business chooses to issue securities as a means of generating capital, it faces a wide range of transactional, regulatory, and compliance issues. Each type of corporate security has different fiscal, operational, and legal implications. Businesses should work closely with a corporate securities attorney to determine which type of instrument is right for their needs and ensure compliance with the ensuing regulatory considerations.

Because a securities strategy is integral to securing various types of capital and has such widespread implications for corporate structure and operations, entrepreneurs should consult with a corporate securities attorney in the early stages of business planning and development. Understanding how corporate securities law applies to your business will help you secure venture capital and other types of financing.

Types of Corporate Securities

A corporate security is any financial asset or instrument that can be traded in a marketplace. There are four basic types of corporate securities:

Debt Securities

Debt securities are largely held by institutional investors, as well as by governments and nonprofits. Debt securities represent money that has been borrowed and must be repaid. Debt securities specify terms like the amount borrowed, interest rate, and maturity date, and the interest rate typically depends upon the credit rating of the borrower. Debt securities require regular interest payments as well as repayment of the principal and are often issued in the form of:

  • Bonds. Corporate bonds make up the majority of the U.S. bond market and can be issued to finance growth and development, buy back stock or pay dividends, refinance debt, or finance mergers and acquisitions. Bonds are classified by the borrower’s credit rating, specify fixed rate or floating rate interest, and are issued with different terms of maturity, typically from 3 to 10 years.
  • Certificates of Deposit. A Certificate of Deposit is a time-specific deposit, typically issued by a financial institution and backed by FDIC insurance. These debt securities have a fixed interest rate and fixed maturity date and can be a safe, short-term investment.

Equity Securities

Equity securities represent selling interest in the company’s ownership. Equity securities give ownership rights to shareholders, giving them a stake in the company.. Equity holders are not entitled to regular interest or principal repayments but can benefit from company dividends or sell their shares for capital gains.

Derivative Securities

Derivative securities were originally developed for international trade as a way to lock an exchange rate across different currencies. Today, they are used to minimize risk by ensuring against price movements and increasing access to hard-to-reach markets. The main types of derivatives are:


Futures represent an agreement for the purchase and delivery of a specific asset at an agreed-upon future date. Contracts are standardized and traded on an exchange, and the parties are obligated to complete the transaction and trade the underlying asset.

  • Forwards. Like futures, forwards specify an exchange to take place on a future date. However, forwards are not traded on a marketplace but are simply sold to a buyer who determines the size, terms, and settlement process of the transaction.
  • Options. Options are also similar to futures securities, specifying a future exchange of an asset for a specific price. Options are also traded on the marketplace. However, options do not obligate the buyer to complete the transaction and buy the asset.
  • Swaps. Swaps allow the exchange of one type of cash flow for another. For example, an interest rate swap may allow an investor to exchange a variable interest rate investment for a fixed rate or vice versa.

Hybrid Securities

Hybrid securities blend debt and equity securities. Hybrid securities may include instruments like bonds that can be converted to shares, preferred stocks, or other blended instruments. Hybrid securities are extremely complex, with complex terms and risks that even experienced investors may overlook or misunderstand.

Choosing the type of security that will help your business grow, or the type of security in which to invest is a complex and difficult decision. Determining the right instrument for your needs requires an understanding of your business goals and strategy, along with an understanding of corporate law and governance.

How Can a Corporate Securities Attorney Help Me?

Businesses looking at different ways to raise capital should consult a corporate securities attorney to understand their rights and obligations with different instruments. A corporate securities attorney can also help investors and venture capitalists minimize risk and make smart investments.

Today, many corporations are both issuers of securities and investors in financial marketplaces, increasing their access to capital and protecting their finances in two ways. Integrating a securities and investment strategy into your financial plan from the beginning of a venture is the best way to ensure compliance, reduce risk, and gain financial investment. No matter what your capital strategy is or what stage of development your business is in, a consultation with a corporate securities attorney is a smart financial decision.

The Fridman Law Firm supports corporations and entrepreneurs with expert legal advice on all aspects of business founding and financing, from business formation and intellectual property to venture capital and mergers and acquisitions.

We empower businesses with strategic solutions to a wide range of problems and partner with you for your success. Contact us today or call 212-252-9823 for more information about how our corporate securities attorney can help your business grow.

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