Securities and Exchange Commission Historical Society

The Imperial SEC? - Foreign Policy and the Internationalization of the Securities Markets, 1934-1990

Foreign Technical Assistance

The SEC and the United States Agency for International Development

In November 1961, President Kennedy created the U.S. Agency for International Development (USAID). USAID's mission was to support overseas projects involving economic development, especially in those countries that the U.S. feared might become socialist. Along with U.S. financial aid came U.S. technical assistance. The SEC quickly formed a relationship with USAID and SEC employees fanned out across the world, working with developing nations to create securities markets based on U.S.-style regulation.

In 1964, two SEC staff members traveled to India on a USAID-funded mission, to determine whether the SEC might be able to provide assistance to India in improving the operation and regulation of its stock exchange. In 1966, USAID introduced the SEC to a Pakistani who was the managing director of the Investment Corporation of Pakistan and close to the president of Pakistan. At the time, Pakistan was expected to adopt a variety of securities laws. Specifically the SEC was charged with discussing the philosophy of securities regulation in the U.S., the structure of the SEC, and how to create investor interest and confidence in the capital markets.(50)

The following year, another Pakistani official with the Ministry of Finance spent two weeks with the SEC in Washington, again with the intent of bringing U.S. securities type regulation to Pakistan.(51) Louis Loss, a former SEC staff member and then Harvard Law School professor, later travelled to Pakistan and undertook the drafting of Pakistani securities laws which were modeled on the 1933 and 1934 Acts.(52) SEC officials later helped draft Egypt's securities laws.(53)

As Castro came to power in Cuba, the United States became increasingly concerned about communism and Soviet influence in Latin America. In addition to covert military action, the Kennedy administration increased financial aid and technical assistance to Latin America with the belief that such aid could spur the creation of a middle class which would then usher in democracy.(54) The Kennedy administration viewed Brazil as a crucial ally in its fight against Latin American communism.

In 1965, Norman Poser, an SEC staff member, and Allan Roth, an exchange official, traveled to Brazil as technical assistants on a mission funded by USAID. After a preliminary investigation, the team found that significant additional assistance would be required to create effective regulations for Brazil's stock exchange and to enhance investor confidence. Poser spent six months in Brazil working with various Brazilian officials and drafting securities laws. Poser understood his mission as part of the Cold War. As he later stated, the basic idea was to promote capitalism by encouraging companies to go public and have widely dispersed share ownership. This would provide people with a stake in capitalism and economic stability.(55)

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Footnotes:

(50) October 17, 1966 Memo from William E. Becker on AID request for the SEC to receive S.U. Durrani of Pakistan (courtesy of the National Archives and Records Administration)

(51) January 13, 1967 Letter from Louis Loss to SEC Chairman Manuel F. Cohen, introducing H.U. Beg of Pakistan (courtesy of the National Archives and Records Administration)

(52) Robert L. Knauss, "Report on the Meeting of the Panel on Capital Formation," 61 American Journal of International Law.

(53) April 22, 2008 Fireside Chat on the SEC Office of International Affairs

(54) Diane B. Kunz, Butter and Guns: America's Cold War Economic Diplomacy (New York: The Free Press, 1997).

(55) November 2007 Norman Poser discussion with Felice Batlan.


Related Museum Resources

Papers

January 1965
image pdf (Courtesy of Norman S. Poser)
December 1965
image pdf (Courtesy of Norman S. Poser)
October 17, 1966
image pdf (Courtesy of the National Archives and Records Administration)
January 13, 1967
image pdf (Courtesy of the National Archives and Records Administration)
August 15, 2008
image pdf (Courtesy of Norman S. Poser)
January 20, 2010
transcript pdf (Courtesy of Norman Poser)

Photos

August 1966

"Hominagem" (goodbye party) for Norman and Miriam Poser

(Courtesy of Norman Poser )
August 1966

"Hominagem" (goodbye party) for Norman and Miriam Poser

(Courtesy of Norman Poser )
August 1966

"Hominagem" (goodbye party) for Norman and Miriam Poser

(Courtesy of Norman Poser )
August 1966

"Hominagem" (goodbye party) for Norman and Miriam Poser

(Courtesy of Norman Poser )
August 1966

"Hominagem" (goodbye party) for Norman and Miriam Poser

(Courtesy of Norman Poser )
August 3, 1966

Santos Dumont Airport, Rio de Janeiro

(Courtesy of Norman Poser )
August 3, 1966

Santos Dumont Airport, Rio de Janeiro

(Courtesy of Norman Poser )

Programs

22 April 2008

Fireside Chat - SEC Office of International Affairs

Moderator: Theresa Gabaldon

Presenter(s): Felice Batlan, Michael Mann

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