Marc Schulman


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The Security Act of 1933

Wall Street at the turn of the century

The Security Act of 1933 was the first attempt of the Roosevelt Administration to regulate the stock market.

One of Roosevelt’s major goals was to create a mechanism to regulate Wall Street. The Security Act of 1933 was not emergency legislation to help fight the depression, but rather part and parcel of the Democratic platform. There were a number of different versions of legislation being presented to monitor Wall Street. Roosevelt called on Felix Frankfurter to help put together the final bill and shepherd it through Congress. The final bill called for “full disclosure”. In addition, in the final bill, officers and directors of corporations were to be held personally and criminally responsible for any failure to disclose information.

Congress passed this complex bill by an overwhelming margin. The Security Act of 1933 was signed into law on May 27, 1933. At the signing ceremony, FDR stated: “If the country is to flourish, capital must be invested in enterprise. But those who seek to draw upon other people’s money must be wholly candid regarding the facts on which the investor’s judgment is asked.”