Discuss the Securities Act of 1933 and its objectives.

Expert Solution

The Securities Act of 1933 was established as a result of the stock market crash of 1929. The legislation had two main goals: to ensure more transparency in financial statements so investors can make informed decisions about investments; and to establish laws against misrepresentation and fraudulent activities in the securities markets.

This act is useful for the investors because financial company need to release their financial report and other important information before offering made to the public. This act provides support for the public from fraud or cheat securities sale offering

Objectives:

The Securities Act of 1933 required that investors receive financial information from securities being offered for public sale. This means that prior to going public, companies had to submit information made readily available to investors. This prospectus is required and available on the Securities and Exchange Commission website. Information required includes a description of the company’s properties and business; a description of the security being offered; information about management running the company and financial statements that have been certified by independent accountants.

The other main point of the Securities Act of 1933 was to prohibit deceit and misrepresentations. The act aimed to eliminate fraud that happens during the sales of securities.

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