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Subject: Securities Exchange Act of 1934

The Securities Exchange Act of 1934 is a law governing the secondary trading of securities (stocks, bonds, and debentures) in the United States of America. The Act, 48 Stat. 881 (enacted June 6, 1934), codified at 15 U.S.C. § 78a et seq., was a sweeping piece of legislation. The Act and related statutes form the basis of regulation of the financial markets and their participants in the United States. It is commonly referred to as the “Exchange Act”, the “‘34 Act”, and the “Act of ‘34″.
Companies raise billions of dollars by issuing securities in what is known as the primary market. Contrasted with the Securities Act of 1933, which regulates these original issues, the Securities Exchange Act of 1934 regulates the secondary trading of those securities between persons often unrelated to the issuer. Trillions of dollars are made and lost each year through trading in the secondary market. (Wikipedia Feb 2010)

Market regulation

Effective financial reform unlikely in 2010

Ferdinand Pecora (1933)

The financial reforms of the New Deal lasted for over fifty years and were based on two years of work by the US Senate Pecora Commission, spanning two administrations with bipartisan support.

In contrast, the Obama “reforms” are being concocted in secret to be rushed through the Pelosi-Reid Congress, already famous for passing substantial legislation in the dark of night, without reading the text.

Historically, slap-dash, one-party ‘reforms’ have not survived a Congress controlled by the other party.

Featured articles on inside pages

Stock buybacks

Buybacks + options + hedge funds

Stock buyback programs are a legalized form of market manipulation, sanctioned under SEC Rule 10b-18 and that serve to drive up the price of a company's stock and to give false value to executive stock options.
More ...

Securities Analysis

Managing complexity

Modern capital markets have become so complex that security analysis methods of the 1930s are no longer adequate. Complexity goes beyond financial data to collateral issues such as operations, foreign and domestic taxation, and structural risks. More ...

US Politics

President Obama and the Lincoln Bible

The Crash of 2008 put Barack Obama in the Oval Office and was the culmination of two secular financial trends. Americans now have an untested, inexperienced leader, with strange radical friends and a leftist deficit spending agenda. More ...

US equities

Sarbanes-Oxley and the shortage of equities

The Sarbanes-Oxley Act of 2002, by discouraging companies to go public, will exacerbate the shortage of equities, with a negative effect on the US stock market, although this was not the intent of its authors. Poorly drafted, ill-conceived, and unfair this law does little to protect investors.
More ...

US Bonds

The collapse of the dollar and US bonds?

The extreme spending of the Obama government, combined with irresponsible bank lending policies promoted by Barney Frank and Chris Dodd, portend rising interest rates, the collapse of the bond market, and the end of dollar supremacy. More ...

World Economy

Signs of US losing its groove?

Thirty years ago, US income from abroad was more than double the amount of income that the US paid to the rest of the world. This year, or the next, this foreign income surplus may disappear forever. Is the US 'losing its groove'? More ...

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2010-09-03 16:02