Securities laws are those laws which govern financial institutions. For example, securities laws may make determinations about how banks must properly handle the granting of loans.
Securities laws may, for example, prohibit the granting of loans to individuals that are clearly unable to pay them back. In addition, securities laws would include punishments for those that are guilty of securing a loan using fraudulent practices.
For instance, securities laws may allow for jail time for those individuals who secure a loan using false documentation. The laws would likely allow for jail time, as well as restitution for the loans which were obtained illegally.
Securities laws are in place to protect financial institutions, consumers and the economy. These laws prevent an abuse of financial institutions in an effort to obtain money illegally.