After the stock market crash of 1929, the Securities Act of 1933 was designed to provide investors with financial and other relevant information in regards to the securities being offered for public sale. The Act also prohibits misrepresentation of information and fraud when selling securities. In 1934, the Congress also enabled the Security Exchange Act, which was the reason behind the creation of the Security Exchange Commission. This act gives the SEC the necessary authority to register and regulate securities, brokers and dealers, transfer agencies, and self-regulatory organizations such as the New York Stock Exchange and the Financial Industry Regulatory Authority. The SEC is also required to collect periodic reportings of information by companies with publicly traded securities. If a company owns more than $10 million in assets in which mostly are owned by more than a certain number of holders, then it must file annual reports available to the public. In regards to tender offers, the Commission requires the disclosure of information related to the purchase of 5 percent or more of a company’s securities by another entity or individual. This allows others who have a claim of ownership to make decisions when such events occur. VII. SEC Major Enforcement Actions. …show more content…
These companies have managed to cover their tracks from the law for many years, causing great damage to the SEC’s reputation. For instance, Citigroup’s principal U.S. broker-dealer subsidiary was charged for misleading investors about a Collateralized Debt Obligation (CDO) worth $1 billion related to the housing market where the company made a bet against investors as the market was slowing down. Both the court and Citigroup arranged a settlement of $285 million for