Securities and Exchange Commission
Protecting your stock since June of '34
Purpose:
The purpose of the SEC is to restore investor confidence in by ending misleading sales practices and stock manipulations that lead to the stock market collapse. The SEC prohibits the buying of stock without adequate funds to pay for it. The commission now also acts as adviser to the court in corporate bankruptcy cases.
Seal the Deal
In June of 1934, the Securities and Exchange Commission (SEC) was created as a part of FDR's "New Deal." This is a picture of the SEC's seal, with the date it was founded underneath.
Got a secret, can you keep it?
One of the main purposes of the SEC was to prevent insider trading. Insider trading is when you sell/buy stock based on information that an insider (not the general public) knows about the stock. It could be that the stock is about to fall or it could be that the stock is about to increase in value heavily.
Roosevelt
FDR created the SEC to regulate the stock market and to ensure bank deposits. He believed that in order for America to fully recover, the financial market (such as Wall Street and Banks) needed to be trusted.
Stock Market
Wall Street
The stock market is regulated on Wall Street. Brokers (or stock traders) work on Wall Street. At this time, a lot of companies practiced corrupt practices and costed investors a lot of money.
Black Tuesday
On October 29th, 1929 the stock market crashed. A total of $25 billion was lost. This day is known as "Black Tuesday."