Securities and Exchange Commission Historical Society



The Timeline highlights significant developments in the history of financial regulation against U.S. and world events. Choose a decade to start, scroll down to read more. Learn more about building the Timeline.

U.S. and World Events
Developments in Finanical Regulation

Great Depression

USSR Collectivizes Agriculture

Uniform Sale of Securities Act

Starting with the Kansas Securities Act in 1911, states adopted a variety of laws to protect investors from fraud and raise capital for business. Some states copied the original Kansas law with adjustments to suit local practice; other states, such as New York with the Martin Act in 1921, introduced their own securities laws. To establish a uniform system of state securities regulation, the National Conference of Commissioners on Uniform State Laws prepared the Uniform Sale of Securities Act ("the Act") in October 1929. The Act was adopted in just five states, and in 1943, was abandoned.

Smoot-Hawley Tariff Act

Sponsored by U.S. Senator Reed Smoot (R-UT) and U.S. Representative Willis Hawley (R-OR), the Act raised the dutiable tariff level on imported goods, in an effort to protect American production. President Hoover signed the legislation against his own preference for international cooperation and in spite of widespread opposition from economists and industrialists. Foreign trading partners retaliated with higher tariffs, and American trade was reduced by half, contributing to the depth and length of the global Depression.


Scottsboro Boys Trial

Ultramares Case

Ultramares Corporation v. Touche confirmed the concept of privity, then an essential requirement of any third-party litigation against accountants based on negligence.


Roosevelt Elected President

U.S. Senate Investigates Wall Street

The 1929 crash ended an eight-year bull market fueled by speculation and stock manipulation. Between September 1929 and July 1932, stocks listed on the New York Stock Exchange lost 83% of their value. The U.S. Senate Banking Committee conducted a series of hearings on Wall Street practices to investigate the reasons for the crash and determine how to prevent such occurrences in the future. These hearings were referred to as the "Pecora Hearings," for Ferdinand Pecora, the Committee's counsel and a future SEC Commissioner.

Reconstruction Finance Corporation Act

Congress established and chartered the Reconstruction Finance Corporation (RFC) to provide aid to state and local governments, and loans to banks, mortgage corporations and businesses. The RFC continued under the New Deal to help restore business prosperity. During World War II, the RFC merged with the Federal Deposit Insurance Corporation (FDIC). The RFC closed in 1957.

Berle and Means on Corporate Governance

Adolf A. Berle, Jr. and Gardiner Means published The Modern Corporation and Private Property, their seminal study of the management, ownership and governance of corporations. Their critique, noting that corporate ownership and management was increasingly diverging to the detriment of shareholders, laid the groundwork for future governance initiatives.


New Deal Begins

Prohibition Ends

Hitler Appointed German Chancellor

Federal Securities Laws Drafted

Felix Frankfurter, an acquaintance of President Franklin Roosevelt and an expert in administrative law at Harvard Law School, was summoned to Washington to begin drafting what was to become the Securities Act of 1933. Frankfurter enlisted his young colleagues, James Landis, Benjamin Cohen, and Thomas Corcoran. In 1937, Landis was appointed SEC Chairman and, in 1939, Roosevelt appointed Frankfurter to the U.S. Supreme Court. Cohen and Corcoran went on to play important roles in the New Deal.

Securities Act of 1933

The Securities Act of 1933 was the first general federal law to regulate the issuance of securities. The Act required certain issuers of securities to file registration statements with the Federal Trade Commission and to provide a prospectus to investors. The FTC had the power to issue stop orders to prevent the sale of an issuer's securities. The purpose of the Act was to prevent fraudulent securities offerings and to ensure that the public had adequate information regarding the issuer and nature of a security. The Act was one of the major pieces of legislation enacted during Roosevelt's first 100 days in office.

The original draft of the Act did not require that financial statements be audited ("certified"). Later drafts considered the value of independent audits, and the feasibility of requiring that audits be made by accountants on staff of the agency that would administer the Act. The bill as passed confirmed the requirement of certification by independent public accountants.

NYSE Requires Audited Financial Statements

In 1932, the New York Stock Exchange began asking all corporations applying to list securities to agree that published annual financial statements be audited by independent public accountants. The following year, the NYSE required that listing applications include audited financial statements for the most recent fiscal year. By then, over 90% of listed companies had independent audits.

Wall Street Strike

In protest of the '33 Act, major Wall Street firms refused to bring new issues of stock to the market.

Investment Bankers Code Committee Formed

Following creation of the National Industrial Recovery Administration (NIRA), securities dealers created the Investment Bankers Code Committee to promulgate a "code of fair competition" and a "code of fair trading practices" for the industry.

Glass-Steagall Act

The U.S. Banking Act of 1933, known as the Glass-Steagall Act after its Congressional sponsors - U.S. Senator Carter Glass (D-VA) and U.S. Representative Henry Steagall (D-AL) - limited commercial bank securities activities and affiliations between commercial banks and securities firms, and established the Federal Deposit Insurance Corporation (FDIC) to insure bank deposits with funds from the banks. It was enacted after the failure of nearly 5,000 banks during the Great Depression.


Dust Bowl

Mao Zedong Begins Long March

Securities Exchange Act of 1934

In February 1934, Roosevelt sent a message to Congress recommending that it pass legislation to regulate the exchanges. Senator Duncan Fletcher and Congressman Sam Rayburn introduced what was to become the Securities Exchange Act of 1934. The Act required the registration of stock exchanges.

The U.S. Securities and Exchange Commission was created pursuant to the Act. The Act gave the SEC power to approve stock exchange rules, prohibit manipulative trading practices, regulate corporate proxy practices and increase disclosure requirements.

Joseph Kennedy Appointed SEC Chairman

At the time of his appointment, Joseph P. Kennedy had retired from a lucrative career on Wall Street and as a businessman. He was a large contributor to the Democratic Party and a close acquaintance of Roosevelt.


U.S. Supreme Court Finds NRA Unconstitutional

Social Security Act

Nuremberg Laws Enacted in Germany

SEC Opens Regional Offices

The SEC opened regional offices in Atlanta, Boston, Chicago, Denver, Fort Worth, New York City, San Francisco and Seattle.

Public Utility Holding Company Act (PUHCA)

The Public Utility Holding Company Act, drafted primarily by Benjamin Cohen, provided the SEC with power to limit the size and organization of utility holding companies. PUHCA eliminated unfair practices by electricity and natural gas companies, including excessive rates, self-dealing, and unreliable service.

Lower Court Rules PUHCA Unconstitutional

In In re American States Public Service Co., a federal court in Maryland held the Public Utility Holding Company Act unconstitutional. Various other suits also challenged PUHCA, resulting in inconsistent and conflicting lower court opinions, and preventing the SEC from enforcing the Act.


Spanish Civil War

Hoover Dam Built

King Edward VIII Abdicates

U.S. Supreme Court Rules on Securities Act of 1933

In 1935, J. Edwards Jones filed a registration statement with the SEC. One day before it was to become effective, the SEC ordered Jones to show why a stop order should not be issued. Instead, Jones sought to withdraw the statement, which the SEC prohibited him from doing. Jones brought suit challenging the constitutionality of the '33 Act and the SEC's refusal to allow him to withdraw. In Jones v. SEC, the Supreme Court ruled that the SEC must allow him to withdraw. The Court's conservative majority rebuked the SEC, calling its practices akin to the odious "Star Chamber" of England.

Accounting Professionals Merge

The American Society of Certified Public Accountants (ASCPA), formed in 1921 and acting as a federation of state societies, merged with the American Institute of Accountants (AIA), founded in 1887. The new AIA agreed to restrict future membership to CPAs. The organization was re-named the American Institute of Certified Public Accountants (AICPA) in 1957.

Industrial Development Bonds

Mississippi was the first state to issue industrial development bonds, in an effort to use state financing power to build up private industry.


Japan Invades China

Hindenberg Disaster

SEC Accounting Series Release

The SEC Office of the Chief Accountant announced that it would issue periodic publications of opinions on accounting principles, towards the development of uniform standards and practice in major accounting questions. The first Accounting Series Release (ASR) was issued in April 1937. ASRs were re-named Financial Reporting Releases (FRR) in 1982, and were later codified as Codification of Financial Reporting Policies (CFRP).

Federal Incorporation Legislation Fails

With support from SEC Chairman William O. Douglas, U.S. Senators Joseph O'Mahoney and William Borah submitted a bill mandating federal incorporation of businesses engaged in interstate commerce. While the framers of the Securities Acts intended that such legislation would follow, Congress was unwilling to enact the wide-ranging incorporation bill.


German Kristallnacht

Anschluss of Austria

New York Stock Exchange Governance Reorganized

The New York Stock Exchange reorganized its structure of governance after the discovery that Richard Whitney, former president of the Exchange, had embezzled funds and securities. The SEC held hearings to investigate the extent to which Exchange members were aware of and failed to report Whitney's conduct. The Whitney scandal, in part, led to the creation of a full-time Exchange president and the replacement of floor traders and specialists with a body weighted to house brokers.

U.S. Supreme Court Upholds PUHCA

In Electric Bond and Share v. SEC, the Supreme Court upheld the constitutionality of the Public Utility Holding Company Act. The Court deferred decision on the most controversial aspects of PUHCA, including the "death penalty" provision. Following the decision, utility companies began to register with the SEC, but refused to voluntarily divest and reorganize, requiring the SEC to litigate such cases.

Maloney Act

The Maloney Act amended the 1934 Act to provide for the formation of a national association of brokers and dealers that would create and enforce disciplinary rules and promote just and equitable principles of trade. The SEC was provided with the power to review all disciplinary decisions and rules of this body.


The SEC had struggled over accounting presentations it considered incorrect, accepting full disclosure of incorrect accounting rather than restatement. Accounting Series Release No. 4, Administrative Policy on Financial Statements, clarified that disclosure would be inadequate for accounting practices for which there was no substantial authoritative support or if the practice varied from a published SEC view. Through ASR No. 4, the SEC reserved the right to say who had substantial authoritative support, but opened the way to give that recognition to standards issued by the accounting profession.

In response to ASR No. 4, the American Institute of Accountants expanded its Committee on Accounting Procedure and gave it responsibility to issue pronouncements on accounting principles without the approval of the AIA membership or governing Council.

McKesson & Robbins Fraud

The SEC's exposure of the fraudulent financial statements of McKesson & Robbins, Inc., revealing significant fictitious items in sales, inventories and accounts receivable, was the most searching investigation to date by a government agency into independent audits and the practices of the audit profession. The following year, the American Institute of Accountants required auditors to observe inventories and confirm receivables when either was significant.


World War II Begins in Europe

Trust Indenture Act

The Trust Indenture Act contained a variety of provisions designed to protect the holders of debt securities covered by an indenture. It applied to most indentures relating to securities required to be registered under the ’33 Act.

NASD Created

Under the terms of the Maloney Act, the National Association of Securities Dealers registered on August 7th as a self-regulatory organization. By year end, over 2,600 broker-dealer firms joined the NASD.

Douglas Named to Supreme Court

SEC Chairman William O. Douglas was appointed to the U.S. Supreme Court, forming a solid New Deal majority. He became the longest-serving Associate Justice, retiring in 1975.

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