What is the Securities Exchange Act of 1934 and how does it relate to securities fraud?

The Securities Exchange Act of 1934 is a federal law that requires companies to register with the U.S. Securities and Exchange Commission (SEC) before they can trade securities in the stock market. The SEC is responsible for monitoring and regulating this market. The Act was passed in response to the stock market crash of 1929 and the subsequent Great Depression. Under the Act, companies must provide accurate and truthful information about their business operations, financial condition, and any securities they are offering for sale. The Securities Exchange Act of 1934 also requires companies to report any fraud or deceit in the sale or purchase of securities. This is known as securities fraud. It is illegal for companies or individuals to make inaccurate or false statements about securities in order to induce someone to buy or sell the securities based on false information. Penalties for securities fraud can be severe and include fines, jail time, and other sanctions. In California, the California Department of Business Oversight (DBO) is the primary regulator of securities fraud. The DBO is responsible for enforcing the Securities Exchange Act of 1934, as well as other state and federal laws that relate to securities fraud. Companies and individuals can be investigated by the DBO and may face civil and criminal penalties if they are found to have violated the law. If you believe you may have been victimized by securities fraud in California, you should contact the DBO for assistance.

What is the Securities Exchange Act of 1934 and how does it relate to securities fraud?

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