The Securities And Exchange Commission :: essays research papers

The Securities and replace CommissionIn 1934 the Securities Exchange Act created the SEC (Securities and Exchange Commission) in response to the stock softwood place crash of 1929 and the Great Depression of the 1930s. It was created to protect U.S. investors against malpractice in securities and monetary markets. The goal of the SEC was and still is to carry out the mandates of the Securities Act of 1933 To protect investors and oblige the integrity of the securities market by amending the current laws, creating new laws and seeing to it that those laws are put ond.During the 1920s, approximately 20 million Americans took advantage of post-war prosperity by purchasing shares of stock in various securities exchanges. When the stock market crashed in 1929, the fortunes of galore(postnominal) investors were lost. In addition, banks lost great sums of money in the Crash because they had invested severely in the markets. When people feared their banks might not be able to fa bricate back the money that depositors had in their accounts, a run on the banking corpse caused many bank failures. After the crash, public confidence in the market and the economy fell sharply. In response, telling held hearings to identify the problems and look for solutions the coiffure was found in the new SEC. The Commission was established in 1934 to enforce new securities laws that were passed with the Securities Act of 1933 and the Securities Exchange Act of 1934. The two new laws verbalize that Companies publicly offering securities must tell the public the truth astir(predicate) their businesses, the securities they are selling and the risks involved in the investing. Secondly, People who sell and trade securities must treat investors fairly and honestly, putting investors interests first.2Franklin Delano Roosevelt defeated Herbert vacuum in a landslide in the 1932 election and began to work on his New Deal. In the New Deal four primaeval regulatory bodies were est ablished The National Labor Relations Board, Civil astronautics Authority, Federal Communications Commission, and the Securities and Exchange Commission. Wall Street was not catch with the coming regulation, but Congress was confident that the Street was seen as an escaped target for the Crash and the Depression that followed. In response, the SEC was created by Congress on June 6, 1934 for the purpose of protecting the public and the individual investors against malpractice in the financial markets. Commenting on the creation of the SEC, Texas Congressman and future Speaker Sam Rayburn admitted3 he didnt know whether the legislation passed so readily because it was so smashing or so incomprehensible.