Securities Act of 1933

Key Highlights

• The Securities Act of 1933 is a U.S. law passed after the 1929 stock market crash to protect investors.

• The Act builds trust in the stock market by ensuring investors get the real scoop before investing, helping them avoid risky or fraudulent deals while keeping the market fair and stable.

What is Securities Act of 1933?

The Securities Act of 1933 is a U.S. law passed after the 1929 stock market crash to protect investors. It makes sure companies selling stocks, bonds, or other securities are honest and upfront, so investors know what they’re getting into.

Key Points

• Full Disclosure: Companies must register their securities with the Securities and Exchange Commission (SEC) and share key details like their business plans, management info, and audited financials in a document called a prospectus.

• No Fraud Allowed: The law bans lies, scams, or shady practices when selling securities.

• Investor Protection: By requiring clear, honest info, it helps investors make smart choices and gives them legal backup if they’re misled.

• Who It Covers: Applies to most securities sold across state lines, though some small or private sales might be exempt.

Why It Matters?

The Act builds trust in the stock market by ensuring investors get the real scoop before investing, helping them avoid risky or fraudulent deals while keeping the market fair and stable.