Securities Law

9 Pages 2270 Words

he stock market crashed and the fortunes of countless investors were lost. Banks also lost great sums of money because they had invested in the markets. People feared that their banks might not be able to pay back the money they had in their accounts, and a “run” on the banking system caused many bank failures.
The public soon lost confidence in the markets. There was a belief that for the economy to recover, the public’s faith had to be restored. Congress had hearings to try to identify the problems and find an answer for them. They then passed the Securities Act of 1933 and the Securities Exchange Act of 1934.
There were basically two main purposes for these laws. The first one was that companies publicly offering securities for investment dollars must tell the public the truth about their businesses, the securities they are selling, and the risks involved in investing. The second premise was that people who sell and trade securities must treat investors fairly and honestly, putting investors’ interests first.
The above-mentioned laws helped establish the SEC in 1934. At that time, President Franklin Delano Roosevelt appointed Joseph P. Kennedy, President John F. Kennedy’s father, to serve as the first Chairman of the SEC.
Organization
The SEC consists of five presidentially-apointed Commissioners, four Divisions and 18 Offices. There are approximately 2,900 staff members, and the headquarters is in Washington, D.C. The SEC also has 11 regional and district Offices located throughout the country.
As mentioned above, the SEC has five Commissioners who are appointed by the President of the United States with the advice and consent of the Senate. The term of a Commissioner lasts five years and is staggered so that one Commissioner’s term ends on June 5 of each year. No more than three Commissioners may belong to the same political party. The President also designates one of the Commissioners as Chair...