Not surprisingly, corporate and securities law is a hot topic in the business world. Landing on the wrong side of the law can land companies in big trouble. Not only can the legal fees be incredibly high (and potentially include jail time, depending on the issue), but legal troubles can also impact stockholder confidence, and thus, the price of stocks themselves.
This week, for example, shares of PJT Partners Inc. have plummeted. Why? It was recently announced that former managing director for the company?s Park Hill Group, Andrew Caspersen, was arrested for fraud. According to a recent report, the fraud in question was mostly fictitious deals Caspersen said were occurring between a private equity fund and PJT. Caspersen invented financiers who didn?t exist, created fake email handles, and even set up fake domain names as well.
The United States Securities and Exchange Commission (known to most as the SEC) caught wind of this thanks to a suspicious client, and charged Caspersen. He has also been charged by Bahara. Following this news, the price of stocks for the company dropped as much as $9.50 per share — the stocks are currently trading at $19.96. Whether the company will bounce back from this, only time will tell. Not surprisingly, many securities law firms are following this case, and urging stockholders with PJT Partners Inc. to contact them regarding this recent development.
Caspersen, for better or for worse, will not be the first person to try and get around the SEC. In 2014 alone, the SEC charged over 135 people with violations regarding reporting and disclosure alone. Overall, the SEC handles over 700 cases every year, and collects billions of dollars in fees.
While this may sound concerning to those running businesses, it?s important that corporate lawyers work with companies in order to make sure everything is legal and aboveground. It is of the upmost importance that consumers feel that the stock market is not ?rigged? — if a majority of people were to pull their money out of the stock market, after all, the entire market would crash.
While most people may not care too much about the ins and outs of corporate and securities law, investors know only too well how important it can be. Companies worried about the SEC shouldn’t put off consulting experienced lawyers before it’s too late — and stock prices drop.