From the July 2007 issue of Investment Advisor • Subscribe!

Depression-Era Financial Reforms

More On Legal & Compliance

from The Advisor's Professional Library
  • Whistleblowers A whistleblower is any individual providing the SEC with original information related to a possible violation of federal securities law.  The Dodd-Frank Act established a whistleblower program that enables the SEC to reward individuals who voluntarily provide such information.
  • Suitability and Fiduciary Duty Recommending suitable investments is more than just a regulatory obligation.  Many investors bring cases claiming lack of suitability, so RIAs must continuously put the onus on clients to notify the advisor of changes in their financial situation.  
Glass-Steagall Act of 1933: Prohibited most securities activities by commercial banks. Separated commercial banking from investment banking.

Securities Act of 1933: Regulated the issuance of securities by requiring the registration of new offerings and the full disclosure of financial information.

Securities and Exchange Act of 1934: Established the Securities and Exchange Commission with broad authority to regulate the securities industry, markets, and trading.

Public Utility Holding Company Act of 1935: Enacted to address fraud, stock manipulation, and other abuses that had led to the collapse of major utility companies.

Maloney Act of 1938: Authorized self-regulatory organizations to police the securities industry under the direction of the SEC. Led to 1939 designation of the National Association of Securities Dealers as a self-regulatory organization for the securities industry.

Investment Company Act of 1940: Established regulatory framework for mutual funds, also known as investment companies or investment trusts. Required registration with the SEC and full disclosure of relevant information.

Investment Advisers Act of 1940: Required registration of investment advisers with the SEC and imposed antifraud provisions on their activities.

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