Writing Resources
Week 2 Regulatory Bodies and Regulations Assignment The Securities Act 1933 was enacted as a result of the market crash that occurred in the United States of America It acted as the first comprehensive legislation that offered guidance on sales of securities This came as a result of the existence of high information asymmetry in the securities market at the time The two key objectives of this act were to demand that investors be provided with information regarding securities that were being sold It was also meant for prohibiting misrepresentations deceit and other forms of fraud in the securities exchange market It was not until 1934 that Securities Act of 1934 which is the key legislation that led to the establishment of the Securities Exchange Commission This study focuses on financial and investment fraud and the role that these legislations and enforcing body SEC plays in limiting such fraud in the light of Bernie Madoff case Bernard Madoff scammed an estimated 50 billion from his investors over a 20 year period Investopedia 2015 According to the 1933 Securities Act those issuing securities in the market were expected to disclose their business description of the securities being issued management system of the organization issuing the security and certified financial statements of the accounting entity All these forms of legislation were aimed at prohibiting fraud from occurring in the market Securities Act of 1934 provided for the development of Securities Exchange Commission SEC
