what is the Securities Exchange Act of 1934?

The Securities Exchange Act of 1934 is a significant piece of legislation that was enacted by the United States Congress in response to the stock market crash of 1929. This act was designed to regulate the securities industry and protect investors from fraudulent activities. It established the Securities and Exchange Commission (SEC), which is responsible for enforcing the laws and regulations about the trading of securities. The act also requires companies to provide regular financial disclosures to the public, ensuring transparency and accountability in the financial markets.

One of the key provisions of the Securities Exchange Act of 1934 is the requirement for companies to register with the SEC before they can issue securities to the public. This registration process involves providing detailed information about the company's business operations, financial condition, and management. By requiring companies to disclose this information, the act aims to protect investors by ensuring that they have access to accurate and reliable information before making investment decisions.

Another important provision of the act is the regulation of insider trading. Insider trading refers to the buying or selling of securities based on material non-public information. The act prohibits insiders, such as company executives and directors, from trading on such information. This provision is crucial in maintaining fairness and integrity in the financial markets, as it prevents individuals with privileged information from gaining an unfair advantage over other investors.

The Securities Exchange Act of 1934 also established rules and regulations for securities exchanges, brokers, and dealers. It requires exchanges to register with the SEC and comply with certain standards, such as ensuring fair and orderly markets and providing equal access to all participants. Brokers and dealers are required to register with the SEC as well, and they must adhere to specific rules regarding their conduct and business practices.

In addition to regulating securities markets and protecting investors, the act also provides mechanisms for enforcement and penalties for violations. The SEC has the authority to investigate potential violations of the act and take legal action against individuals or companies that engage in fraudulent or manipulative practices. The penalties for violating the act can be severe, including fines, disgorgement of ill-gotten gains, and even imprisonment.

Overall, the Securities Exchange Act of 1934 plays a crucial role in maintaining integrity and fairness in the U.S. securities markets. By establishing regulatory oversight, promoting transparency, and protecting investors from fraudulent activities, this act has helped to build trust in the financial system. It continues to be a cornerstone of securities regulation in the United States, adapting over time to address new challenges and developments in the industry.

The Law Offices of Timothy L. Miles
Tapestry at Brentwood Town Center
​300 Centerview Dr., #247
Brentwood, TN 37027
Phone: (855) 846–6529
​Email: [email protected]

timothy l. miles

Nashville attorney Timothy L. Miles is a nationally recognized shareholder rights attorney raised in Nashville, Tennessee. Mr. Miles has dedicated his career to representing shareholders, employees, and consumers in complex class-action litigation. Whether serving as lead, co-lead, or liaison counsel, Mr. Miles has helped recover hundreds of millions of dollars for defrauded investors,  shaped precedent-setting decisions, and delivered real corporate governance reforms. Judges and peers have repeatedly recognized Mr. Miles’ relentless advocacy for the underdog, as well as his unbendable ethical standards. Mr. Miles was recently selected by Martindale-Hubbell® and ALM as a 2022 Top Ranked Lawyer, 2022 Top Rated Litigator. and a 2022 Elite Lawyer of the South. Mr. Miles also maintains the AV Preeminent Rating by Martindale-Hubbell®, their highest rating for both legal ability and ethics. Mr. Miles is a member of the prestigious Top 100 Civil Plaintiff Trial Lawyers: The National Trial Lawyers Association,​Class Action:  Class Action: Top National Trial Lawyers, National Trial Lawyers Association (2023), a superb rated attorney by Avvo, a recipient of the Lifetime Achievement Award by Premier Lawyers of America (2019) and recognized as a Distinguished Lawyer, Recognizing Excellence in Securities Law, by Lawyers of Distinction (2019); a Top Rated Litigator by Martindale-Hubbell® and ALM  (2019-2022); America’s Most Honored Lawyers 2020 – Top 1% by America’s Most Honored (2020-2022).  Mr. Miles has published over sixty articles on various issues of the law, including class actions, whistleblower cases, products liability, civil procedure, derivative actions, corporate takeover litigation, corporate formation, mass torts, dangerous drugs, and more.  Please visit our website or call for free anytime.

CONTACT                                                      
The Law Offices of Timothy L. Miles
Tapestry at Brentwood Town Center
​300 Centerview Dr., #247
Brentwood, TN 37027
​​Phone: (855) 846-6529
​Email: [email protected]
​