Securities Act of 1933

Passed by Congress in 1996, the National Securities Markets Improvement Act, or NSMIA, established a clear boundary between federal and state regulatory authority over securities.

Under Section 18 of the Securities Act of 1933, federal law preempts state registration requirements for a specific group of securities known as federal covered securities.

When a security falls into this category, state administrators under the Uniform Securities Act cannot require full state registration or perform merit reviews of the offering.

There are four primary categories of federal covered securities tested on the exam.

Those can include being charged for participating in violations, being barred from practicing before the Commission, and being barred from penny stock activity.

And remember, a violation of Section 5 of the Securities Act does not require intent.

A sale that is neither registered nor exempt violates the law.

When I was at the Commission, many unregistered distribution cases followed the same path.

In the United States, three laws matter.

The 1933 Act requires registration when securities are first sold.

The 1934 Act created the SEC and requires periodic reports.

The Sarbanes-Oxley Act of 2002 set up the PCAOB, the Public Company Accounting Oversight Board, to oversee auditors and made senior executives sign off on reports personally.

Start with the order.

Under the Securities Act of 1933, in a registered offering like this one, it's unlawful to sell the security until the registration statement is in effect.

Until the SEC declares it effective, nobody buys anything.

So I just tell her no?

Good as it always is to have you along, everybody.

It is a very, very safe bet that the most read document in American capitalism today is Securities and Exchange Commission Form S-1, a registration statement under the Securities Act of 1933, filed this morning by Anthropic PBC.

That's Public Benefit Corporation, which is all about what the company is trying to be.

and which is a story for another day.

We don't like this, so why do I wanna still give deference to this? But let me just, uh, use the book, uh, to get there, which is you wrote a great part in the book about the sort of the historical background here, and you go over, you know, the car industry that wrote the first, uh, traffic codes.

Uh, you look into stock exchange disclosures that, uh, were ultimately incorporated into the Securities Act of nineteen thirty-three.

Also, you mentioned that there is a darker side to this, right? The same auto coalition, the one that gave us the word jaywalking and decided who the streets belonged to.

Uh, so what does, uh, history teach us about telling a good corporate lawmaking from self-serving lawmaking?

Yeah, just to add to what Parker's talking about in terms of the systemic kind of built-in tendency to create the conditions for market financial crises.

And it goes back to the 1929 crash and then the Securities Act of 32 and 33, where Rules were put in place like the Glass-Steagall Act and other rules to prevent the cause of the 29 crash, which was over leverage.

And since that period, over the decades, all those guardrails were eroded away, particularly in the 1980s under Reagan.

The various deregulation that went on there took away a lot of the safety measures that were put in place, and so speculation increased.