Securities Act of 1933

The 1933 Securities Act was the first major federal law regulating the sale of securities to the public. It defines securities broadly, including stocks, bonds, and investment contracts, and aims to prevent fraud by requiring full disclosure of information about the company and the securities being offered. The Act mandates registration with the SEC unless an exemption applies, ensuring transparency and protecting investors. It remains relevant today, especially for startups, and works alongside the 1934 Act to regulate secondary sales.

What is the primary purpose of the 1933 Securities Act?

• To manage corporate taxes

• To regulate the sale of securities to the public

• To control interest rates

• To oversee banking operations

Which of the following is considered a security under the 1933 Act?

• Insurance policies

• Stocks

• Commodities

• Real estate

What is required for a company to issue securities to the public under the 1933 Act?

• A bank loan

• A government grant

• A registration with the SEC

• A private investor

What document is typically used to disclose information about a company and its offering?

• A shareholder agreement

• A tax return

• A prospectus

• A business plan

How does the 1933 Act relate to the Securities and Exchange Act of 1934?

• It contradicts the 1934 Act

• It works in conjunction with the 1934 Act

• It has no relation to the 1934 Act

• It replaces the 1934 Act