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Federal Securities Act & SEC

Federal Securities Act & SEC. By: Colin Hast ings and Lee Usiskin. Different Kinds of Securities. Debt securities Banknotes Bonds Equity securities Common Stocks Derivative contracts Options Futures. What Was the Federal Securities Act? .

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Federal Securities Act & SEC

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  1. Federal Securities Act & SEC By: Colin Hastingsand LeeUsiskin

  2. Different Kinds of Securities • Debt securities • Banknotes • Bonds • Equity securities • Common Stocks • Derivative contracts • Options • Futures

  3. What Was the Federal Securities Act? • Alternately referred to as the “truth in securities law” • Made investing more transparent • Required businesses to provide financial information to investors before investing • Prohibited fraud and misrepresentation in the sale of securities

  4. What is the SEC • U.S Securities and Exchange Commission • Created by the Federal Securities Act of 1934 • Enforced the Federal Securities Act of 1933, the Trust Indenture Act of 1939, and the Investment Company Act of 1940 among others • Still in existence today

  5. How Did it Affect the Government? • Government became involved in people’s investments • Made investing more fair (fought against insider trading) • Did not increase federal spending • Government fought against big business • Required businesses to supply investors with correct financial information

  6. How Effective Was the SEC? • Effective in regulating stock market • Regulated trade of securities • Defined individual’s antifraud right • Individual can sue stock issuer • Deemed constitutional

  7. SEC Today • 3,748 employees as of 2010 • Financial failures • Documents about crimes committed by Lehman Brothers, Goldman Sachs, and other financial companies allegedly destroyed • Failed to stop Madoff fraud • November 2012-Mary Schapiro announced a December resignation

  8. Works Cited • Sarka, Deepa. "Securities Law History." Legal Information Institue: Open Access to Law Since 1992. Ed. Thomas R. Bruce and Peter1 W. Martin. Cornell University, n.d. Web. 26 Nov. 2012. <http://www.law.cornell.edu/wex/securities_law_history>.   • Dietzel, Susan, and Cheryll Olson-Collins. "A Brief History of Securities Regulation." State of Wisconsin Department of Financial Institutions: Strengthening Wisconsin's Financial Future. Wisconsin Department of Financial Institutions, n.d. Web. 26 Nov. 2012. <http://www.wdfi.org/fi/securities/regexemp/history.htm>. • Securities and Exchange Comission. U.S. Securities and Exchange Comission. Ed. Thomas Butler. Securities and Exchange Comission, n.d. Web. 26 Nov. 2012. <http://www.sec.gov/index.htm>. • United States. Cong. Senate. ‘‘Securities Act of 1933’’. (May 27, 1933, ch. 38, title I, Sec. 1, 48 Stat. 74.). Washington:GPO, 1933. Print. • Viswanatha, Aruna. "Schapiro Stepping down at SEC, Walter to Step in." Reuters. Thomson Reuters, 27 Nov. 2012. Web. 30 Nov. 2012. <http://www.reuters.com/article/2012/11/27/us-sec-schapiro-nyt-idUSBRE8AP0ON20121127>.

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