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Corporate & Securities Law

A guide to the basics of U.S. corporate and securities law.

History of Federal Securities Regulation & Major Acts

Picture of Launch Visualization Tool. Accessed at November 29, 2021. United States Securities and Exchange Commission.

When the stock market crashed in October 1929, public confidence in the markets plummeted. There was a consensus that for the economy to recover, the public's faith in the capital markets needed to be restored. Congress held hearings to identify the problems and search for solutions.

Based on the findings in these hearings, Congress — during the peak year of the Depression — passed the Securities Act of 1933. This law, together with the Securities Exchange Act of 1934, which created the SEC, was designed to restore investor confidence in our capital markets by providing investors and the markets with more reliable information and clear rules of honest dealing.

The Investment Company Act of 1940 regulates the organization of companies, including mutual funds, that engage primarily in investing, reinvesting, and trading in securities, and whose own securities are offered to the investing public.   And the Investment Advisers Act, also of 1940, requires that firms compensated for advising others about securities must register with the SEC and conform to regulations designed to protect investors.

Sarbanes-Oxley Act (2002) mandated a number of reforms to enhance corporate responsibility, enhance financial disclosures and combat corporate and accounting fraud, and created the "Public Company Accounting Oversight Board," also known as the PCAOB, to oversee the activities of the auditing profession.

Dodd-Frank Wall Street Reform and Consumer Protection Act (2010) set out to reshape the U.S. regulatory system in a number of areas including but not limited to consumer protection, trading restrictions, credit ratings, regulation of financial products, corporate governance and disclosure, and transparency.

Source: U.S. Securities & Exchange Commission website.