Question of the Day: What major event caused the federal government to start regulating the stock market?
Which historical event caused the federal government to step in regarding the stock market?
Answer: The stock market crash of 1929, which led to the Great Depression.
- What do you know about people’s immediate reaction to the 1929 stock market crash? How do you think you would react if the stock market suddenly crashed?
- What are some ways that investing today is different from investing in the early 20th century?
- What are some potential consequences of making immediate financial decisions in reaction to current events?
Behind the numbers (DFI):
"The great stock market crash of 1929 and the ensuing depression are generally credited with providing the impetus for federal securities legislation. The first major federal legislation enacted in reaction to the stock market crash was the Securities Act of 1933 (33 Act). The 33 Act, administered by the newly created U.S. Securities and Exchange Commission (SEC), provides for the registration of the initial distribution of most securities. During its consideration, some legislators wanted the law to take the form of the New York Fraud Law while others wanted it to provide the type of merit tests which are now found in some blue sky laws."
Check out the Investing unit in NGPF's Semester Course
Check out one of NGPF's most popular investing activities in which students track the long-term performance of stocks they select: 5 Stocks on Your Birthday