What Are Some Highlights of the History of the Securities Exchange Commission?


Quick Answer

In 1934, the United States established the Securities and Exchange Commission to regulate the trading of stocks, commodities bonds and other types of securities, according to History. When the stock market crashed on Oct. 29, 1929, there was virtually no regulation or control on the issuing and trading of securities.

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Full Answer

Congress passed The Securities Exchange Act of 1934 establishing the SEC to regulate over-the-counter markets, stockbrokers and major market exchanges, explains History. The SEC monitored the financial disclosures of corporations, and The 1935 Public Utility Holding Company Act authorized the SEC to break up any large public utility companies into smaller companies while adding federal regulations on utility rates and finances.

The primary purpose of the laws established was to restore investor confidence in publicly offered securities and capital markets, states the U.S. Securities and Exchange Commission. Congress also wanted to force companies that offered publicly traded securities to tell the truth about their financial dealings and to inform the investors of the risks associated with buying their securities. The president of the United States at the time was Franklin Delano Roosevelt, and he appointed Joseph P. Kennedy, President John F. Kennedy’s father, as the first chairman of the SEC.

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