Securities Act

United States [1933]

Written by

The Information Architects of Encyclopaedia Britannica

Last updated

July 19, 2026

Quick Summary

The Securities Act of 1933 is a landmark U.S. federal law that mandates full disclosure of all relevant information when a company offers securities for public sale. This act was a direct response to the stock market crash of 1929. The crash, which began on Black Tuesday, October 29, 1929, led to a severe economic downturn known as the Great Depression.12

In an effort to restore investor confidence and prevent future market collapses, the Securities Act of 1933, along with the Securities Exchange Act of 1934, established regulatory frameworks. These laws aimed to end misleading sales practices and stock manipulations. The Securities and Exchange Commission (SEC) was created in 1934 to oversee securities markets and brokers, ensuring transparency and fair practices.1

Summary created from Britannica articles using AI. AI can make mistakes, so verify using Britannica articles.

3 Britannica Sources

Ask Britannica AI about this topic

Britannica doesn't have a full article on this topic, so we've curated a list of our relevant coverage.

due diligence
…example, Section 11 of the Securities Act of 1933 may protect issuers of publicly traded stock from liability for inaccurate statements if they can show they performed adequate due diligence in ascertaining the veracity of those statements. In addition, Chapter 8 of the Federal Sentencing Guidelines allows for the reduction…
Read More
…example, Section 11 of the Securities Act of 1933 may protect issuers of publicly traded stock from liability for inaccurate statements if they can show they performed adequate due diligence in ascertaining the veracity of those statements. In addition, Chapter 8 of the Federal Sentencing Guidelines allows for the reduction…
Read More