The Securities Act of 1933 was also referred to as “truth in securities” law. This law had two primary objectives and applied only to the sale of securities. First it required investors have financial and other specified information concerning securities being offered for public sale in interstate and foreign commerce. It also prohibited deceit, misrepresentations, and to prevent fraud in the sale of securities. There were a number of items considered securities such as stocks, bonds, notes, debentures, warrants, voting trust certificates, subscriptions, rights to oil, gas and minerals, and limited partnership interest.
According to Jennings 2015, “the U. S. Supreme Court defined a security as a contract, transaction, or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party. The actual 1933 act language was known as Howey Test, courts have been reluctant to impose restrictions on the definition of security” (p.628). The Securities and Exchange Commission (SEC), with this act they had have the power to register, regulate, and oversee the sales of securities under both the 1933 and 1934 acts. This act gives the SEC the right to require random …show more content…
Jennings 2015 explains in the text that “Unless and exemptions applies, anyone selling securities must complete certain filing requirement before the securities can be sold legally. Certain investments, called exempt securities, have been excluded specially from coverage of the 1933 act. Some of these exemptions include: securities issued by federal, state, country, or municipal governments for public purpose; commercial paper; banks, saving and loans, and religious and charitable organizations; insurance policies; annuities; securities of common carriers; stock dividends and stock splits and charitable bonds”
According to Jennings 2015, “the U. S. Supreme Court defined a security as a contract, transaction, or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party. The actual 1933 act language was known as Howey Test, courts have been reluctant to impose restrictions on the definition of security” (p.628). The Securities and Exchange Commission (SEC), with this act they had have the power to register, regulate, and oversee the sales of securities under both the 1933 and 1934 acts. This act gives the SEC the right to require random …show more content…
Jennings 2015 explains in the text that “Unless and exemptions applies, anyone selling securities must complete certain filing requirement before the securities can be sold legally. Certain investments, called exempt securities, have been excluded specially from coverage of the 1933 act. Some of these exemptions include: securities issued by federal, state, country, or municipal governments for public purpose; commercial paper; banks, saving and loans, and religious and charitable organizations; insurance policies; annuities; securities of common carriers; stock dividends and stock splits and charitable bonds”