Key Securities Fraud Provisions of the Securities Exchange Act of 1934

by Scott L. Silver

Last Updated May 13, 2025 In Laws

The Securities Exchange Act of 1934 is a federal law that established the Securities and Exchange Commission (SEC) and gives it the authority to regulate the trading of securities. The act primarily focuses on regulating the trading of securities on secondary markets.

If you are an investor and believe you have been defrauded by an individual or entity, a knowledgeable securities fraud attorney can have a critical impact on the outcome of your case. A lawyer with in-depth knowledge of the key securities fraud provisions of the Securities Exchange Act of 1934, and keen insight into the inner workings of securities fraud cases, can fight to recover your losses from fraudsters or those who aided and abetted them.

What To Know About The Securities Exchange Act Of 1934

The Securities Exchange Act of 1934 is a federal law that regulates the trading of securities on stock exchanges, giving the SEC the authority to oversee the securities industry. The Act governs the operations of securities exchanges, including rules regarding trading practices, market manipulation, and insider trading.

The law oversees securities transactions that occur in the secondary market. Because the law also formally established the SEC, this gives the agency broad power to register and regulate brokerage firms, transfer agents, clearing agencies, and the broader securities industry.

This act followed the passage of the Securities Act of 1933. The primary difference between these two laws is that the former governs the initial offering of new securities (primary market), while the latter regulates the trading of already issued securities on the secondary market.

Important Provisions In The Securities Exchange Act Of 1934

The Securities Exchange Act of 1934 includes numerous key provisions that regulate securities exchanges, require companies to disclose material information to investors, and prohibit fraudulent trading practices. Through establishing the SEC to enforce these regulations and overseeing broker-dealer activities, it aims to protect investors by ensuring transparency and fair market operations.

The act primarily regulates the trading of securities on stock exchanges and over-the-counter markets after they have been initially issued. Under its provisions, public companies must file regular financial reports with the SEC, including annual (Form 10-K) and quarterly (Form 10-Q) statements, detailing their financial performance and significant events.

Section 10(b) and Rule 10b-5 provisions prohibit any manipulative or deceptive practices in connection with the purchase or sale of securities, including insider trading. Brokers and dealers must register with the SEC and adhere to specific standards regarding customer protection, recordkeeping, and capital adequacy.

The act regulates how companies can solicit shareholder votes through proxy statements, thus ensuring transparency in corporate governance. It also sets rules for large-scale acquisitions of a company’s shares through tender offers. Finally, it recognizes and oversees self-regulatory organizations, such as the Financial Industry Regulatory Authority, which monitor and discipline their members.

Contact An Attorney When Another Party Violates The provisions Of The Securities Exchange Act of 1934

If you have been financially harmed by people or companies who violated the Securities Exchange Act of 1934 or other federal laws, you may be entitled to monetary compensation from numerous parties. An attorney can evaluate your unique circumstances to determine whether you can sue the investment firm, broker, financial advisor, or other party that may have defrauded you.

Silver Law Group is knowledgeable about the key provisions of the Securities Exchange Act of 1934 and can take appropriate legal action to help you collect money lost to fraudulent dealings. We can work relentlessly on your behalf to get the full and fair compensation you are entitled to. Contact Silver Law Group to receive your free consultation and discuss possible legal strategies for your case. We work on a contingency fee basis.