Understanding How the Florida Securities Act Affects You

The Florida Securities Act is the set of laws determining how securities fraud offenses are handled. Here’s what you need to know if you have suffered losses as a result of a stockbroker or financial advisor’s violation of this act.

What Is the Florida Securities Act?

The Florida Securities Act, also known as the Florida Securities and Investor Protection Act, was designed to protect investors from deceptive practices and fraud connected to the sale of securities. Also known as the “anti-fraud” provision, §5 17.301 states what security activities are illegal. The Clark Law Group, P.A. represents clients who are victims of various white-collar crimes like securities crimes.

An investigation of the Florida Department of Financial Services, Office of Financial Regulation (OFR) with the Bureau of Financial Investigations may result in prosecution requiring the services of a criminal defense lawyer for the defendant. Those who are accused of selling securities may be convicted of three violations per victim.

However, a lawyer familiar with federal covered security is helpful when something illegal happens in the sale of securities or property in which a person has a beneficial interest. Investors who want to bring a claim for negligent security or for damages should contact an experienced Florida securities lawyer from Clark Law Group, P.A., to help you unravel your case.

What You Need to Know About the Florida Uniform Securities Act

The Florida Uniform Securities Act, §517.301, and Rule lOb-5 are basically identical and similarly constructed. It makes it unlawful for those connected with the sale or purchase of a security to:

  • Misrepresent through omission or fraudulent statement
  • Cause financial damages
  • To overtly or inadvertently defraud
  • Or otherwise engage in any act, course of business, or practice that is considered deceit or fraud.

Although the consequences of failing to adhere to the regulations stated in Rule lOb-5 are more severe, the wording of §517.301 makes it easier for the plaintiff to prove. With the additional complexities involved, it is necessary to consult an experienced law firm if you are the victim of fraud.

Understanding Florida Securities Law

Florida securities law is complex and requires the assistance of professionals for most people to understand. Florida Statute Section 517.021 states that a security refers to the following:

  • Bonds
  • Investment contracts
  • Promissory notes
  • Stocks

To determine that a crime was committed, the prosecutor must ascertain whether the transaction involved an investment that is a security. It must consist of an investment of money to pursue a joint enterprise expecting that the other person will produce profits.

There are several exceptions to investments that fall outside the Florida Securities and Investor Protection Act. These exemptions include securities that don’t need to be registered, and the seller isn’t required to have a license. Property in which people have a beneficial interest fall under this classification.

Strict Liability Offenses of the FL Securities Act

Many security crimes are considered strict liability offenses of the FL Securities Act. Strict liability offenses occur whether or not the individual is aware that what they are doing is against the law.

If you have received investment losses due to a violation of fraud, you should retain the services of a Florida attorney. §517.301 violations are considered third-degree felonies that are punishable for up to five years in prison. In situations where there are five victims or more, and the losses are more than $50,000, they are considered first-degree felonies that are punishable for up to 30 years.

Based on §517.241(3), “the same civil remedies provided by the laws of the United States for the purchasers or sellers of securities, under such laws, in interstate commerce also extend to purchasers or sellers of securities under this chapter.”

Civil remedies are also available to victims of securities fraud. Those who are involved in the sale or purchase of a security that violates §517.301 may include any of the following:

  • Agent
  • Director
  • Officer
  • Partner

According to investment laws, anyone else who may be acting on behalf of the seller or purchaser during the transaction is jointly liable.

Florida Securities Commission and What It Does

The Florida Securities Commission regulates security sales to or from Florida. It manages and enforces obedience to state law as outlined in the FL Securities and Investor Protection Act.

State and federal securities laws are complicated and require those thoroughly educated on the subject and practices to wade through them. That includes administrators of the Commission and attorneys knowledgeable about securities and investment fraud.

Only licensed securities are eligible for sale by licensed stockbrokers unless they are deemed by F.S.§517.051 or F.S.§517.061 as exempt securities, or they are classified as a federal covered security. Plus, a licensed broker can commit a crime if they misrepresent or omit a material fact regarding the sale of the security or investment to an investor. 

 

Florida Securities and Exchange Commission

The Florida Securities and Exchange Commission, better known as the Financial Services Commission, is comprised of the Office of Insurance Regulation and the Office of Financial Regulation, which deals with the banking, financial, and security industries.

The Financial Services Commission gives the final approval of the regulations created and imposed by either office.

How to Get a Florida Securities License

Some FL statutes focus exclusively on securities, while others focus on the seller’s credentials and whether they have a Florida Securities License. The Department of Financial Services prohibits any unregistered “dealer, issuer, or associated person” from selling securities. 

Stockbrokers work for broker-dealer firms as security sales agents. Brokers are required to pass either state exam Series 63 or 66 and The Financial Industry Regulatory Authority exam Series 6 or 7 and continue their education per regulatory requirements.

Florida Stockbrokers must register with the Florida Office of Financial Regulation, Division of Securities, the Securities and Exchange Commission (SEC), and one other self-regulatory organization.

Florida Securities Regulation and Investments

 

The Division of Securities enforces Florida Securities Regulation administers to promote economic growth while protecting public investors. Divided into the Bureau of Registrations to record brokerages and employees and the Bureau of Enforcement to examine records and process complaints, the Division of Securities ascertains state law compliance.

If you or a loved one has suffered damages due to a violation of Florida securities and investor laws or federal securities laws, contact a stockbroker fraud lawyer experienced in security and investments fraud like one found at the Clark Law Group, P.A., for a free consultation.