Financial Law Definition
Financial Law encompasses everything its very name implies.
From banking, to securities and commodities, and even broker disputes, Financial Law and financial lawyers cover all aspects of money handling and transactions.
Whether you are a high stress broker working on Wall Street, a small business owner, or if you are investing you own money for retirement, you should at least be familiar with the major sections of financial law.
Learn everything about Financial Law
This article will clear up a number of misconceptions about financial law, and also show you what you need to know to protect your money and best interests during financial transactions.
Table of Contents (jump ahead!)
Banking Law
Banks are, in theory, very stable financial institutions, and regarded as dependable places to hold, save, and handle money.
With economic trends fluctuating the way they have over the past few years, it is important for business owners and consumers alike to familiarize themselves with how banks work, how they are regulated, and how you can safeguard yourself.
Almost all financial transactions involve banks – for loans of all types to interest rates, mortgages, and investments.
Banks are governed by agencies that straddle the line between the public and private sectors, as most transactions – while regulated and enforced by federal law, usually involve private consumers and businesses.
These agencies are the Federal Reserve; the Federal Deposit Insurance Corporation (FDIC); the Office of Thrift Supervision; and the Office of the Comptroller of the Currency.
These agencies regulate and enforce banking practices, as well as safeguarding both investors and consumers in the event that a bank can no longer sustain itself, as we saw with a number of financial institutions back in 2008.
To give you a broad overview of what a few of these agencies do, please note the following:
- The Federal Reserve – All banks which are nationally accessible must become members of the Federal Reserve, as the Fed oversees and regulates financial transactions nationwide.
- Federal Deposit Insurance Corporation (FDIC) – This entity oversees banks that are state-chartered and are therefore not required to become Federal Reserve members. This means that while state-chartered banks are not subject to all federal financial laws and regulations, the FDIC can ensure that those banks adhere to state financial law, and can oversee operations on a state-by-state basis.
- The Office of Thrift Supervision is dedicated to overseeing the operations of federal savings and loans, as well as federal savings banks.
- The Office of the Comptroller of the Currency oversees national banks and their operations. You can recognize a bank that belongs to this organization very easily, as the bank’s name actually contains the word “National.”
The Difference Between Federal & State Banking Regulations
As you have read, there are different agencies that oversee different types of banks, and while national banks must have a membership with the Federal Reserve, state-chartered banks are not required to do so.
While state-chartered banks must work with their respective state’s department of banking, they are still required to be members of the FDIC so that there is a governing oversight entity that handles the different operation of state-chartered banks.
Hot videos about Banking Law
Wells Fargo Bank Violates Federal Banking Laws
Former Bank Employees Speak Out About Unethical Practices
Securities
Securities Law is a subsection of Financial Law, and takes in both state an federal regulations regarding the trading of securities, the laws against insider trading, and the complex laws surrounding the taxation of securities.
Generally speaking, securities fall under two broad terms: debt securities and equity securities.
Debt securities are typically bonds – that is financial contracts wherein money is borrowed.
With debt securities, there is a given rate of interest (the maximum of which is regulate and enforced by the governing entities listed earlier), and the whole of the loan, including interest, is given a set date to be paid in full.
Equity securities are financial holdings in which you purchase ownership interest.
Stock shares are a perfect example of an equity security in which you purchase shares, or ownership interest, in a company.
As the company’s profitability grows, so does the value of your stock, so you can potentially see a very good return rate on the interest of your initial investment.
Considering that the field of securities is broad and varied, there are many state and federal laws and regulation in place to protect businesses, investors, and consumers.
Things such as disclosure of worth for companies that have “gone public” and have people investing in stock, reports, investor requirements, broker behavior and regulations, and guidelines for companies that are considering offering stock to the public are all regulated by state and federal oversight agencies.
Securities Law / Stockbroker Misconduct
Whether you are a business owner who is thinking about going public with your stock in order to gain investors, or a private consumer who is considering an investment loan or buying a few shares in a company to start a nest egg, you need to familiarize yourself with Securities Law, or seek out the advice of a financial lawyer who can steer you in the right direction and show you what to look out for in order to protect yourself and your investments.
Commodities
The topic of commodities can be very complex.
This section is not going to get into each particular, but it will give you a general understanding, so that you can discuss commodities with a professional, or at least know what to ask for when seeking the assistance of a financial lawyer.
In a nutshell, commodities are goods and services that are sold on the open market.
Basic things that the entire world uses – oil, grain, gold, beef, silver – all are commodities.
The reason that commodities trading is so widely popular is because the goods and services are universal.
One ounce of gold in America is the same as one ounce of gold anywhere else in the world.
This is where commodity trading and futures trading (an investment system by which the price of a good or service is predicted to go either up or down in cost at a date set in the future, and the investments based on such predictions and trends) both become very big businesses.
But because the commodity and futures trading deal almost solely with the financial investment of others (rather than say, people walking into banks with carts of corn or hers of livestock), there are many state and federal regulations in place that exist to protect for the commodity seller and consumer alike.
Commodities and Futures are a very open, yet highly complex and specialized section of Financial Law.
Why Trade Commodities & Futures
Most newspapers have entire sections dedicated to the open market, and more books have been published on commodities in the past decade than anyone has time to read.
If you are thinking about making commodity investment, or want to dive into trading futures, seek out the advice of an investment firm, or better yet, consult with a financial lawyer to see what you can and cannot do with your money, what types of investments are “safe,” and how to safeguard yourself in case a particular commodity market takes a nosedive.
Broker Disputes
Brokers, basically speaking, are people or firms you consult with and trust when making financial investments.
They handle everything from bonds to stocks to commodities and futures.
Because not all investments are sold to the public for trading and investing, there are many exclusive products that can only be purchased through an investment broker.
As such, brokers sort of exist in that area which involves both private businesses and consumers, as well as the financial regulations governing investments on both state and federal levels.
The National Association of Securities Dealers, and the U.S. Securities and Exchange Commission govern brokers and investment firms, ensuring that brokers act in the best interest of the consumers.
On occasion, there will be a dispute – usually between a private consumer and an investment broker – where the confidentiality, trust, or handling of funds is thought to be abused.
This is where a large part of Financial Law, dedicated to overseeing the interests of the consumers and enforcing the regulations in place for the behavior of brokers, comes into play.
The rules, laws, and oversight agencies are involved when claims come forth of broker disputes, fraud, insider trading, and similar charges.
This section of Financial Law is to protect the rights and interests of the consumers, and allow them to file claims against brokers who they think have mishandles investments or abused their trust.
Filing such claims involves a thorough understanding of Financial Law and Broker Disputes in order to fully protect yourself, recuperate your financial losses, and to ensure such things do not happen again.
In these cases, it is of the utmost importance that you seek the help of a financial lawyer, because they are dedicated to using the existing regulations to make certain that you are not defrauded on your investments.
Escrow Disputes involved in Lake Charles Home Purchases
Bottom Line
Financial Law runs the gamut from setting up your first checking account to making it big on Wall Street with investments that can allow you to make a comfortable retirement fund.
However, because of the laws and agencies regulating everything from simple banking to high-stakes futures trading, understanding the complexities of Financial Law from a business, investor, or consumer perspective is often frustrating and bewildering.
If you are thinking about getting bonds to cash in on later down the road, or if you are perhaps setting up a fund for your children and grandchildren – if you want to invest in a startup company that you think will explode on the stock market shortly after going public, or if you want to invest a ton of money on a tip that the price of soy futures will skyrocket a year from now, you need a financial lawyer.
Financial lawyers know the state and federal regulations for everything from banking to large stock portfolios, and also know how to protect your interests and money so that you don’t get taken in a fraudulent scheme, or that you aren’t left high and dry in case of an economic downturn.
For you peace of mind now, and for a secured economic future, you owe it to yourself to consult with a financial lawyer today.
Best Selling Financial Law Books
The 4 Laws of Financial Prosperity: Get Control of Your Money Now! (Formerly The Four Laws of Debt Free Prosperity / This is the same great book with a new title) by Blaine Harris, Charles Coonradt – (118 pages)
Buy The 4 Laws of Financial Prosperity: Get Control of Your Money Now! by Charles Coonradt, Blaine Harris
Average Amazon.com rating: 5 stars out of 35 reviews
Click this link to save today $3.75 (25%)
The Law of Banking and Financial Institutions by Richard Scott Carnell, Jonathan R. Macey, Geoffrey P. Miller – (912 pages)
Buy The Law of Banking and Financial Institutions by Jonathan R. Macey, Richard Scott Carnell, Geoffrey P. Miller
Average Amazon.com rating: 4 stars out of 3 reviews
Click this link to save today $35.07 (20%)
Financial Law by Joanna Benjamin – (750 pages)
Buy Financial Law by Joanna Benjamin
Average Amazon.com rating: 5 stars out of 3 reviews
This super Financial Law book ships for FREE with Super Saver Shipping and has special price
Business Law: Legal Environment, Online Commerce, Business Ethics, and International Issues by Henry R. Cheeseman – (984 pages)
Buy Business Law: Legal Environment, Online Commerce, Business Ethics, and International Issues by Henry R. Cheeseman
Average Amazon.com rating: 5 stars out of 4 reviews
This Business Law book ships for FREE with Super Saver Shipping and has special price
Cengage Advantage Books: Business Law Today: The Essentials by Roger LeRoy Miller, Gaylord A. Jentz – (737 pages)
Business Law Today: The Essentials by Roger LeRoy Miller, Gaylord A. Jentz
Average Amazon.com rating: 4.5 stars out of 12 reviews
Click this link to save today $39.00 (23%)
Confidentiality in Offshore Financial Law by Rose-Marie Belle Antoine – (408 pages)
Confidentiality in Offshore Financial Law by Rose-Marie Belle Antoine
Special Offers Available for this Offshore Financial Law Book
Essentials of Business Law by Anthony Liuzzo – (640 pages)
Essentials of Business Law by Anthony Liuzzo
Read 9 customer reviews (old version)
Average Amazon.com rating: 4.7 stars out of 9 reviews
Special Offers Available for this Business Law Book
Anderson’s Business Law and the Legal Environment, Comprehensive Volume by David P. Twomey, Marianne M. Jennings – (1257 pages)
Anderson's Business Law and the Legal Environment by Marianne M. Jennings, David P. Twomey
Average Amazon.com rating: 5 stars out of 5 reviews
Click this link to save today $64.71 (24%)
The International Law on Foreign Investment by M. Sornarajah – (554 pages)
Buy The International Law on Foreign Investment by M. Sornarajah
Average Amazon.com rating: 4.8 stars out of 3 reviews
Click this link to save today $15.39 (20%)
Law for Business and Personal Use by John E. Adamson, Amanda Morrison – (675 pages)
Buy Law for Business and Personal Use by John E. Adamson, Amanda Morrison
Average Amazon.com rating: 5 stars out of 1 review
Click this link to save today $43.38 (39%)
Smith and Roberson’s Business Law by Richard A. Mann, Barry S. Roberts – (1095 pages)
Buy Smith and Roberson's Business Law by Richard A. Mann, Barry S. Roberts
Average Amazon.com rating: 4.8 stars out of 10 review
Click this link to save today $68.46 (25%)
The Entrepreneur’s Guide to Business Law by Constance E. Bagley, Craig E. Dauchy – (816 pages)
Buy The Entrepreneur's Guide to Business Law by Constance E. Bagley, Craig E. Dauchy
Average Amazon.com rating: 4.8 stars out of 3 review
Click this link to save today $18.15 (22%)
An Introduction to Law and Economics by A. Mitchell Polinsky – (208 pages)
Buy An Introduction to Law and Economics by A. Mitchell Polinsky
Average Amazon.com rating: 5 stars out of 3 reviews
Special Offers Available for this Law and Economics Book
Business Law Today, Standard Edition by Roger LeRoy Miller, Gaylord A. Jentz – (952 pages)
Buy Business Law Today by Roger LeRoy Miller, Gaylord A. Jentz
Average Amazon.com rating: 5 stars out of 5 reviews
Click this link to save today $82.96 (30%)
Contemporary Business and Online Commerce Law (7th Edition) (MyBLawLab Series) by Henry R. Cheeseman – (1104 pages)
Contemporary Business and Online Commerce Law by Henry R. Cheeseman
Average Amazon.com rating: 5 stars out of 1 review
Click this link to save today $82.96 (30%)
Study Guide for Business Law by Henry R. Cheeseman – (500 pages)
Buy Study Guide for Business Law by Henry R. Cheeseman
Average Amazon.com rating: 5 stars out of 1 review
Special Offers Available for this Law and Economics Book
The New Financial Deal: Understanding the Dodd-Frank Act and Its (Unintended) Consequences by David A. Skeel, William D. Cohan, Harvey R. Miller (Foreword) – (220 pages)
Buy The New Financial Deal: Understanding the Dodd-Frank Act and Its (Unintended) Consequences by David A. Skeel, William D. Cohan
Average Amazon.com rating: 4.5 stars out of 6 reviews
Click this link to save today $12.35 (35%)
Business Law: Text and Cases – Legal, Ethical, Global, and Corporate Environment by Kenneth W. Clarkson, Roger LeRoy Miller, Frank B. Cross - 1038 pages)
Buy Business Law: Text and Cases - Legal, Ethical, Global, and Corporate Environment
Average Amazon.com rating: 4 stars out of 4 reviews
Click this link to save today $83.36 (30%)
Get the Best Legal Advice and Legal Aid
Related Financial Law articles
- Insurers Look to ‘Expert’ to Make Their Case as Regulators Weigh Financial Overhaul (blogs.wsj.com)
- HOLY BAILOUT: Federal Reserve Now Backstopping $75 Trillion in Bank of America’s Derivatives (jhaines6.wordpress.com)
- Mr. Hoenig Goes to Washington (economix.blogs.nytimes.com)
- The Too Big To Fail – just shafted you and me, again (prof77.wordpress.com)
- Obama Aims for Compromise With Hoenig Pick for FDIC (blogs.wsj.com)
3 
259 
2
No comments yet.