With the rise and rise of initial coin offerings (ICOs), much attention has been paid to how the U.S. Securities and Exchange Commission (SEC) and federal prosecutors view this innovation. And rightfully so, as those enforcement systems carry stiff penalties and even the potential for jail.
But investors and companies should also know that buyers can sue sellers privately under the federal securities laws based on similar theories. Sellers should know about these laws to understand the risks they face, and buyers should know their remedies if treated unfairly.
‘Enforcement 40’ for 2020
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