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Business LibreTexts

24: Securities Regulation

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    Learning Objectives

    After reading this chapter, you should understand the following:

    • The nature of securities regulation
    • The Securities Act of 1933 and the Securities Exchange Act of 1934
    • Liability under securities laws
    • What insider trading is and why it’s unlawful
    • Civil and criminal penalties for violations of securities laws

    Both the registration and the trading of securities are highly regulated by the Securities and Exchange Commission (SEC). A violation of a securities law can lead to severe criminal and civil penalties. But first we examine the question, Why is there a need for securities regulation?