Securities Acts

Popular name given to the two major federal statutes regulating the issuing of and market trading in corporate securities.

The securities act of 1933; 15 U.S.C. §§77a et seq., deals primarily with the initial distribution of securities by the issuer, and its objective is to provide full disclosure of facts material to the securities for sale so that investors are able to make informed investment decisions. Cox, Corporations 234 (1975).

The securities exchange act of 1934; 15 U.S.C. §§78a et seq., is designed to regulate post-distribution trading in securities and provides for the registration and regulation of securities exchanges, including disclosure of information about the issue for the purpose of prohibiting fraud and manipulation in connection with the sale or purchase of securities. See 69 Am. Jur. 2d Securities Regulation-Federal §183. Federal securities laws specifically preserve the jurisdiction of state commissions to regulate securities transactions as long as there is no conflict with federal law.

The other acts constituting the remainder of the federal securities statutes are as follows:

The investment company act of 1940 -- act that regulates publicly owned companies engaged primarily in the business of investing and trading in securities. 15 U.S.C. §§80a-1-80a-52.

The investors advisers act of 1940 -- act that establishes a scheme of registration and regulation of investment advisers comparable to that contained in the Securities Exchange Act of 1934 (above) with respect to broker-dealers but not as comprehensive. A limited private cause of action for rescission but not damages has been found to be implied in the Act. See 444 U.S. 11; 15 U.S.C. §§80b-1 et seq.

The public utility holding company act of 1935 -- act that regulates the financing and operation of electric and gas public utility holding company systems. 15 U.S.C. §§79 et seq.

The securities investor protection act of 1970 -- act that established the Securities Investor Protection Corporation [S.I.P.C.] and gave it the power to supervise the liquidation of financially troubled securities firms and the payment of the claims of their customers. 15 U.S.C. §§78aaa et seq.

The trust indenture act of 1939 -- act that regulates public issuers of large debt securities, i.e., over $5,000,000. 15 U.S.C. §§77aaa-77bbb.



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