The Federal Securities Act of 1933

Douglas, William O.; Bates, George E.

doi:10.2307/791346

Cited by 20 publications

(6 citation statements)

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“…The Securities Act of 1933 and the Securities and Exchange Act of 1934, designed to prevent frauds and stock market manipulations prevalent in the 1920s, regulated securities issuances and established shareholder rights against corporate insiders (Avedian, Cronqvist, & Weidenmier, ; Douglas & Bates, ; Simon, ). The SEC's mandate included also the supervision of corporate disclosure.…”

Section: How Us Groups Disappearedmentioning

confidence: 99%

The great pyramids of America: A revised history of U.S. business groups, corporate ownership, and regulation, 1926–1950

Kandel

Kosenko²,

Mørck

et al. 2018

Strategic Management Journal

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Research Summary: Control‐magnifying (pyramidal) business groups—multiple tiers of partially‐owned listed affiliates and fully‐owned private affiliates, a dominant organizational form around the world—are virtually absent in America today. Using newly‐assembled historical data, we show that such groups were ubiquitous in the U.S. economy in the 1930s. They came under attack because of their economic and political sway: Some New Deal reforms—proscriptions against public utilities pyramids, intercorporate dividend taxes, and rules governing investment companies—were explicitly aimed at deterring existing groups and preventing new ones from forming. Others, for example, estate taxes and securities law reforms, may have also worked against them. No single reform triggered the immediate dissolution of groups; they broke up under an ongoing anti‐big business sentiment. These events offer lessons for policymakers today. Managerial Summary: Most listed U.S. firms are “standalone”—they do not control, and are not controlled by, other listed firms. Control‐magnifying (pyramidal) business groups—multiple tiers of partially‐owned listed affiliates and fully‐owned private affiliates (e.g., Samsung or Tata)—are ubiquitous around the world but virtually absent in United States. In such groups, the combination of multiple tiers and partial ownership enables control over vast corporate empires. Using newly‐assembled historical data, we show that the U.S. corporate ownership as we know it today is a recent phenomenon: pyramidal groups were common in United States of the 1930s. President Roosevelt, who regarded their economic and political power as excessive, initiated a sequence of reforms which appears to have worn these groups down and probably also kept new ones from forming. JEL CLASSIFICATION: G3, G34, G38, N22.

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Section: How Us Groups Disappearedmentioning

confidence: 99%

The great pyramids of America: A revised history of U.S. business groups, corporate ownership, and regulation, 1926–1950

Kandel

Kosenko²,

Mørck

et al. 2018

Strategic Management Journal

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“…Satisfaction of the common-law requirements of fraud raised almost insurmountable barriers to recovery. The road of investors has not been an easy one owing to the common-law insistence on scienter, reliance, and causation” (Douglas and Bates, 1933: 174). Brunson MacChesney concluded that the Acts “provide for the investor protection that the common law remedies had failed to afford” (MacChesney, 1938: 145).…”

Section: The Sec’s Enforcement Of Financial Reportingmentioning

confidence: 99%

The Securities Acts and public accounting: Financial statement audits as symbolic reform

Doron

2016

Accounting History

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“…The Securities and Exchange Act of 1934 also created the Securities and Exchange Commission (SEC), with authority to prescribe the accounting standards (i.e. Generally Accepted Accounting Standards) that were required to be followed in the preparation of financial reports (Douglas and Bates, 1933). Many business enterprises were against the requirement to file an annual financial statement with the SEC which would include public disclosure of the financial affairs of listed corporations and audited financial statements prepared in accordance with specific accounting standards.…”

Section: Innovations In Business and Accounting Regulation In A Period Of Liberal Democracymentioning

confidence: 99%

Historical innovations in the regulation of business and accounting practices: A comparison of absolutism and liberal democracy

Baker

Quéré

2015

Accounting History

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This historical review article draws upon two theoretical models to compare state regulatory innovations pertaining to business and accounting practices in two contrasting periods: the Colbert Period, a period of absolutism under Louis XIV in seventeenth-century France; and the period of liberal democracy in the United States in the early twentieth century, during which the US federal government sought to expand its power over the regulation of unregulated capitalist activity. These two contrasting periods of state intervention in business and accounting practices can be characterized as innovations whose underlying design was conditioned by contemporary circumstances. The theoretical models employed include that of Miller (1990), who maintained that a primary "reason of state" (i.e. "political rationality") justifying intervention in business and accounting practices during the Colbert period was "military competition" between France and other European powers. The second theoretical model employed is based on Clarke (2004), who argued that there is cyclicality to reasons of state focusing on "restoring economic stability" in the face of economic crises. This article identifies innovations in the regulation of business and accounting practices that have helped states to obtain the economic resources necessary for the exercise of sovereignty while maintaining social order within their national boundaries.

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The Federal Securities Act of 1933

Abstract: The classes of persons to which Section 11 applies and their various defenses are discussed at p. 190, infra.

Cited by 20 publications

References 1 publication

The great pyramids of America: A revised history of U.S. business groups, corporate ownership, and regulation, 1926–1950

The great pyramids of America: A revised history of U.S. business groups, corporate ownership, and regulation, 1926–1950

The Securities Acts and public accounting: Financial statement audits as symbolic reform

Historical innovations in the regulation of business and accounting practices: A comparison of absolutism and liberal democracy

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