The Securities and Exchange Commission

2300 WordsApr 26, 200110 Pages
Morgan Bennett Mr. Harris History Honors- Per 5 April 2001 The Securities and Exchange Commission In 1934 the Securities Exchange Act created the SEC (Securities and Exchange Commission) in response to the stock market crash of 1929 and the Great Depression of the 1930s. It was created to protect U.S. investors against malpractice in securities and financial markets. The purpose of the SEC was and still is to carry out the mandates of the Securities Act of 1933: To protect investors and maintain the integrity of the securities market by amending the current laws, creating new laws and seeing to it that those laws are enforced. During the 1920s, approximately 20 million Americans took advantage of post-war prosperity by purchasing…show more content…
There are six main laws that govern the Securities Industry, but only four that are relevant to the majority of people. The first law is the Securities Act of 1933, which is often referred to as the "truth in securities". The Security Act of 1933 has two basic objectives: to require investors to receive significant information concerning securities being offered for public sale; and to prohibit deceit, misrepresentation, and other fraud in the sale of securities. These two objectives are accomplished primarily by registration which discloses important financial information. While the SEC requires this information to be accurate, there is no guarantee that it will be. However, if investors purchase securities and suffer losses due to the fact that the information given was incomplete or inaccurate they have recovery rights. The registration process requires corporations to supply the essential facts while minimizing the burden and expense of complying with the law. These requirements include a description of the company's properties and the security to be offered for sale, information about the management of the company and financial statements certified by independent accountants. If U.S. domestic companies file this information, the statements are available on
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