As the Great Depression wreaked havoc on Americans’ confidence in the U.S. markets, Congress passed the Securities Act of 1933, also known as the “Truth in Securities” law, which had two primary objectives:
Require that investors receive financial and other significant information concerning securities being offered for public sale
Prohibit deceit, misrepresentations, and other fraud in the sale of securities
The following year, Congress passed the Securities Exchange Act of 1934, which created the U.S. Securities and Exchange Commission, or “SEC” for short. The SEC has a three-part mission
Protect investors
Maintain fair, orderly, and efficient markets
Facilitate capital formation