Securities and Exchange Commision (S.E.C.)
Intro
In 1930s, the worst economic depression of the United States’ history, which named the Great Depression, began . The economic collapse started with the breaking down of the stock market spread throughout the United States in unbelievable speed and soon took over the state as a whole(603, Brinkley). About 25% of the national workforce was unemployed and their only hope, savings, was banishing with the continuing bank failures (605, Briknkley). It was the time of horror, never-ending fear and hunger. Everything Americans believed seemed like starting to collapse. In this reign of chaos, Franklin Roosevelt from the Democratic Party got elected by offering “New Deal” that will fix the situation. With this New Deal, FDR started to create a lot of different organization in order to get over the Great Depression. Securities and Exchange Commission (SEC) was one of them.
In 1930s, the worst economic depression of the United States’ history, which named the Great Depression, began . The economic collapse started with the breaking down of the stock market spread throughout the United States in unbelievable speed and soon took over the state as a whole(603, Brinkley). About 25% of the national workforce was unemployed and their only hope, savings, was banishing with the continuing bank failures (605, Briknkley). It was the time of horror, never-ending fear and hunger. Everything Americans believed seemed like starting to collapse. In this reign of chaos, Franklin Roosevelt from the Democratic Party got elected by offering “New Deal” that will fix the situation. With this New Deal, FDR started to create a lot of different organization in order to get over the Great Depression. Securities and Exchange Commission (SEC) was one of them.
Foundation of the SEC
SEC’s main purpose was
to regulate and police the stock market (629, Brinkley). More specifically, “to
protect investors,
maintain fair, orderly, and efficient markets, and facilitate capital formation” (SEC.gov). After losing so much money in the Black Tuesday, people’s trust on the stock system was totally disappeared. In
the mid of depression, FDR and his cabinet strongly felt the need to stabilize
the stock market. So, in 1933 Securities Act was passed in congress, and later,
in following year, Exchange Act was also passed. Together, they called the Acts
Securities and Exchange Commission (SEC. gov). The main purposes of the Acts
can be narrowed down into two general agendas. Companies publicly offering securities for investment dollars
must tell the public the truth about their businesses, the securities they are
selling, and the risks involved in investing. And People who sell and trade securities, including brokers, dealers, and exchanges, must treat investors fairly and
honestly, putting investors' interests first (SEC.gov).
With these agendas, the SEC played major rule in order to get over the Great Depression. It took partial blame for the crisis in the stock market in 1929 and took responsibility to investigate some most infamous people behind the incident, including Bernie Madoff, alleged Ponzi scheme mastermind Allen Stanford, and Jon-Paul Rorech and Renato Negrin, formerly a Deutsche Bank Securities bond salesman and a Millennium Partners hedge fund manager, accused by the SEC of insider trading on credit default swaps (Next New Deal).
With these agendas, the SEC played major rule in order to get over the Great Depression. It took partial blame for the crisis in the stock market in 1929 and took responsibility to investigate some most infamous people behind the incident, including Bernie Madoff, alleged Ponzi scheme mastermind Allen Stanford, and Jon-Paul Rorech and Renato Negrin, formerly a Deutsche Bank Securities bond salesman and a Millennium Partners hedge fund manager, accused by the SEC of insider trading on credit default swaps (Next New Deal).
Joseph P. Kennedy
The man Roosevelt chose to put in charge of SEC was Joseph P. Kennedy, the father of JFK, former bank president who became a millionaire in age of 30. Even with his amazing success, his reputation was not very great. He was charged with the crime of selling liquor in Prohibition and became master of stock manipulation (Britannica). It was a great bet for Roosevelt to place him as the chairman of the SEC. However, he believed that because Joseph Kennedy is the master of manipulation himself, he is the right one to find and bust all other corruption in the stock system. And Kennedy followed up with hard and honest work which allowed people to rebuild their trust in the stock market.
The man Roosevelt chose to put in charge of SEC was Joseph P. Kennedy, the father of JFK, former bank president who became a millionaire in age of 30. Even with his amazing success, his reputation was not very great. He was charged with the crime of selling liquor in Prohibition and became master of stock manipulation (Britannica). It was a great bet for Roosevelt to place him as the chairman of the SEC. However, he believed that because Joseph Kennedy is the master of manipulation himself, he is the right one to find and bust all other corruption in the stock system. And Kennedy followed up with hard and honest work which allowed people to rebuild their trust in the stock market.
Conclusion
The SEC directly and
indirectly helped most people in the United States. By reconstructing and
regulating the stock market, the business started to flow and pumped new blood
into the economy’s heart. The group probably mostly benefited from the program
is businessmen, who can now get investment from the stock buyers and grow. And ones
who didn’t really got any benefit is the ones do not have money or interest in
stock market. However, it is clear that SEC helped American economy as general.
The political agenda of the program is diverse; it has characteristics of both liberal and conservative. The revival of the stock market is definitely pro-business and cause more social mobility. But on the other hand, government intervention on the stock market expanded the power of the government, which is liberal value. So, SEC is both liberal and conservative in some degrees. But what important is that the SEC was pretty successful. The best reason why is the fact that the administration still exists, not like others that got abolished through the years. It did what it meant to do and achieved the goal, to reform the stock market.
The political agenda of the program is diverse; it has characteristics of both liberal and conservative. The revival of the stock market is definitely pro-business and cause more social mobility. But on the other hand, government intervention on the stock market expanded the power of the government, which is liberal value. So, SEC is both liberal and conservative in some degrees. But what important is that the SEC was pretty successful. The best reason why is the fact that the administration still exists, not like others that got abolished through the years. It did what it meant to do and achieved the goal, to reform the stock market.
Bibliography
Check the section "Bibliography"
Check the section "Bibliography"