The 21st century has witnessed fundamental evolution in the economic sector. Various economic aspects have come up and developed to make the entire economic process diverse and complex. The maximum development has taken place with respect to the investment facet of the economy. The investment sector has expanded with the help of several investment tools and securities but also comprises of an elaborate legal side that provides a legal backing to all the investment activities. There are specialized investment lawyers who take care of the legal dimension of investment activities.

Introduction to Investments:

To understand the significance of investment lawyers and sound investment laws, it is important to first understand the concept of investments and its underlying nature. Investments refer to engaging capital resources in a particular venture for securing future returns or profits. When individuals invest their money in a particular establishment or project, he does it with an anticipation of profits in due course of time. Hence, this implies that he is ready to risk his current income to gain future profits. Investments refer to holding of cash or securities for an exclusive or a designated purpose.

There are various ways in which individuals can invest their money. There are stocks, bonds, mutual funds, real estate and other securities in which individuals can put in their capital for getting future returns. Business firms float their stocks in the capital markets with the aim of attracting maximum purchasers or stockholders. Investors purchase these stocks by paying the face value of the stock with a view of getting an appraised amount or an amount more than the principal amount. The company for further investment and expansion uses the amount collected by selling stocks. Likewise bonds are also investment instruments but does a company or government take debts from the investors, which they return to them with a fixed rate of interest. Real estate investment or property purchase is also one of the major and probably one of the oldest forms of investments.

A brief overview of these investments gives an idea of the underlying risk that an investor takes initially by investing his capital in a company or a property. Hence, if this investment proposition backfires, the investor must have a defending source or a legal backup to depend upon. Also, the companies must have some laws that govern the process of stock investing to give the system a strong base and framework. This is where an investment lawyer steps in.

A lawyer is a professional and qualified individual who specializes in laws and acts and is an expert in practicing the laws and acts. An investment lawyer is an expert who specializes in the laws, acts and rules that govern the investment sector. Investment lawyers are in charge of the legal side of investments and ensure that the investment transactions take place smoothly within the legal framework. Investors as well as investment companies hire investment lawyers to help them in investment matters and protect them from any unlawful activities and dealings.

Functions of Investment Lawyers:

Investment lawyers have assumed great importance with the growing complexities of investment markets. Some of the key functions of investment lawyers are as follows:

1) Defending against Misconduct: There are times when investors lose money on account of the market fluctuations. However, it is also possible that investors lose money due to the misconduct and unlawful behavior on the part of the stockbroker or the company. There are attorneys who protect investors against financial frauds. They can sue the investment company or the stockbroker on the behalf of the investor and claim the losses borne by the investor.

2) Investment Management: Investment lawyers also play an important role in the process of investment management. Investment lawyers deal with matters like simplifying the prospectuses of large mutual fund organizations for the investors. They are also responsible for the structuring and drafting of contracts and documents of vital importance like the disclosure documents.

3) Investment lawyers also deal extensively in finalizing and drafting contracts involved in investment services along with preparing statements of registration. They also deal with compliance issues for investment advisors.

4) The investment lawyers are also responsible for developing codes of ethics and compliance policies for the investment corporations, investment advisors and stockbrokers and dealers. They are in charge of finalizing on trading restrictions, internal compliance audits and self-examinations.

5) Investment lawyers are also responsible for carrying out the task of fund formation. The process of fund formation is based on organized management structure, which is done by the investment lawyers.

6) The investment lawyers perform the task of representing their clients before investment regulators. These regulators include the central as well as the state investment regulators.

7) Investment lawyers perform a significant task for investment corporations. The lawyers counsel them on the precise investment management systems along with the various types of distribution systems.

8) One of the important functions of investment lawyers is to advise their clients on avoiding litigation.

9) One of the major tasks of the investment lawyer is to deal with the legal matters involved in real estate investments. The investment lawyers help and deal with the aspects of land assemblage, sale-leasebacks, renting and leasing, tax matters, real estate financing, acquisitions and foreign real estate investments.

Need for Investment Lawyer:

As the investment sector expands and becomes more complex and diversified, the processes and systems too become complex and tedious. Considering these factors, all investment corporations, stockbrokers and investors mandatory rely on investment lawyers. The lawyers are in charge of guiding the investors as well as the investment corporations in arbitrary matters, management of securities, investment management, compliance matters and litigation. Each of these factors has an elaborate and extensive research and systems. Hence the investors and firms need the help of an expert who can interpret and practice the laws on behalf of the investor and the investment companies. Hence, the investment lawyers not only act as a protective shield for the investors but also serve support and management assistance to the investment companies. The lawyers are coordinators between the investors and the investment companies.