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The Securities and Exchange Act of 1933 - Essay Example

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DQ1 The Securities and Exchange Act of 1933 and the Securities and Exchange Act of 1934 were necessary due to the Great Depression and market crash of 1929 commonly referred too as Black Tuesday (Google, 2011). Panic was the environment among investors and poverty was growing in America at an alarming rate…
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The Securities and Exchange Act of 1933
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Download file to see previous pages Prohibit deceit, misrepresentations, and other fraud in the sale of securities (Sec, 2011). The following year the Securities and Exchange Act of 1934 was created. The Securities and Exchange Act of 1934 gives the SEC power to register, regulate, and oversee brokerage firms, transfer agents, and clearing agencies as well as the nation's securities self regulatory organizations (SROs) (Sec, 2011). Both these Acts worked as control mechanisms that ensure the market works properly. The consumer of financial instruments needed an agency to properly regulate the market. References Sec.gov (2011). Securities and Exchange Act of 1934. Retrieved November 16, 2011 from http://www.sec.gov/about/laws.shtml#secexact1934. Sec.gov (2011). The Laws that Govern the Securities Industry: Securities Act of 1933. Retrieved November 16, 2011 from http://www.sec.gov/about/laws.shtml. DQ2 At the beginning of the 21st century after decades of a bull market in which people believed on Wall Street the financial industry was devastated by a series of financial scandals including Adelphia, Tyco, WorldCom and the infamous Enron debacle. The U.S. Congress acted quickly in relative terms and by 2002 they formulated a new legislation called the Sarbanes and Oxley Act (SOX). SOX had a very positive impact on the market because it was effective at raising the confidence of the consumers of financial instruments. ...
Corrupt executive managers including CEOs, Controllers, and CFO now face up to 25 years in prison for their crimes. White collar criminals are going to be judged as severely as hard core criminals such as murders, thieves, and drug dealers. One of the cons of the Sarbanes Oxley Act is that it costs several million dollars to implement the regulations. Public companies have been complaining for years about the excessive costs of implementation of the Act. 3. I like your perspective about the importance of the Securities Act of 1933 and 1934. I personally believed that these acts came after the government realized that the market crash on 1929 needed to be prevented from occurring again. It took 58 years for another market crash of similar magnitude to occur. In 1987 Wall Street was devastated by its biggest one day down in value since Black Tuesday. The government always seems to react to news affecting the market. In 2002 the Sarbanes-Oxley Act was created based on a reaction to a series of economic scandals including Enron and WorldCom. 4. You are correct in your asseveration that War Times influence the marketplace. This many be true, but if you think about history is repeating itself. The United States has been at war with Iraq and Afghanistan for nearly a decade with no end in sight. The recession of 2008 occur while the U.S was at war. The U.S. is spending over $100 billion each year in war, while its citizens are suffering in a horrible economy where nearly 1 out of 10 people are unemployed. 5. The Sarbanes Oxley Act was created as a direct consequence of Enron and a series of other financial scandals including WorldCom, Tyco, and Adelphia. It is my opinion that despite the high cost of implementation the Sarbanes ...Download file to see next pagesRead More
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