The Securities and Exchange Commission was created by the Securities Act, which was passed during the Great Depression. This law was passed to reform conditions that led to the stock market crash of 1929.
The Securities and Exchange Commission has several important functions. It is designed to regulate the stock market. It also works to prevent fraud. Prior to the passage of the Securities Act, companies didn’t have to provide factual information to investors. Today, a company must give potential investors information about the company. There were few laws and few regulations regarding the stock market prior to the Great Depression. The Securities and Exchange Commission proposes rules for the stock market and ensures that those rules are being followed. It also regulates the brokers who make investments. The goal of the Securities Act and the Security and Exchange Commission was to restore the confidence of investors in the stock market. To this day, the Securities and Exchange Commission plays an important role in the investment industry.
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