Securities litigation in Georgia is a relatively new but rapidly growing field, linked to the development of the capital market and increased stock exchange activity. This service covers disputes arising from the issuance, trading, and ownership of stocks, bonds, and other financial instruments. The securities market is strictly regulated to protect investor rights and maintain market integrity. Disputes may involve misrepresentation of information by issuers, unscrupulous actions by brokers, violation of shareholder rights, or insider trading. Qualified legal assistance is critical both for investors who have lost capital due to fraud or negligence, and for companies facing regulatory sanctions or shareholder lawsuits.
What Does the Securities Litigation Service Cover?
Specialists offer comprehensive legal support in disputes related to the capital market:
- Investor Disputes: Representing investors against issuers who disseminated misleading information in a prospectus or financial statements.
- Brokerage Disputes: Protecting client interests against brokerage firms for unauthorized trading, conflict of interest, or inadequate investment advice.
- Shareholder Rights Protection: Disputes regarding oppression of minority shareholders, non-payment of dividends, or invalidation of meeting resolutions.
- Bond Defaults: Protecting bondholders' interests in case of non-payment of coupons or failure to repay the principal amount by the issuer.
- Regulatory Relations: Defending companies within the framework of sanctions imposed or inspections conducted by the National Bank of Georgia.
Common Scenarios and Subjects of Dispute
Disputes in this field often develop under the following scenarios:
- Prospectus Liability: A company issued bonds and concealed information about existing financial problems in the emission prospectus. Investors suffered losses and demand compensation.
- Director Liability: Shareholders sue a director for breach of fiduciary duties, which led to a sharp drop in the company's share price.
- Squeeze-out Disputes: A majority shareholder decided to buy out minority shares at an unfair price, leading to a dispute over share valuation.
- Unlicensed Activity: An individual provided investment services without the appropriate license, causing harm to clients.
Georgian Legal Framework
The securities field is regulated by the Law of Georgia on the Securities Market, which establishes rules of conduct for market participants, standards for information disclosure, and liability for violations. Also important is the Law of Georgia on Entrepreneurs, which regulates corporate governance and shareholder rights. The Civil Code of Georgia applies regarding contractual and tort obligations. The main market regulator is the National Bank of Georgia, whose normative acts (e.g., rules on information submission by issuers) are mandatory. Disputes are heard in common courts, although arbitration is also frequently used.
Service Process: What to Expect
The lawyer first conducts a financial and legal analysis of the case. If the dispute concerns bonds or stocks, a detailed study of the prospectus, financial statements, and corporate documentation becomes necessary. Financial experts are often needed to determine the amount of damages. The process may include negotiations with the issuer on restructuring or direct litigation. Class actions are still rare in Georgia, but similar mechanisms can be used in cases involving many aggrieved investors.
Why Choose Legal.ge?
Securities law requires a deep synthesis of finance and law. On Legal.ge, you will find lawyers with experience in complex capital market transactions and disputes. Our specialists are familiar with both local regulations and international best practices. Protect your investments and corporate interests with the help of industry experts on Legal.ge.
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