Unveiling Organizational Visions
Edited by Christina Garsten and Monica Lindh de Montoya
Chapter 6: Transparency, Democracy and the SEC: Seventy Years of Securities Market Regulation
Christopher Yenkey I recommend to the Congress legislation for Federal supervision of traﬃc in investment securities in interstate commerce. In spite of many State statutes the public in the past has sustained severe losses through practices neither ethical nor honest on the part of many persons and corporations selling securities. Of course, the Federal Government cannot and should not take any action which might be construed as approving or guaranteeing that newly issued securities are found in the sense that their value will be maintained or that the properties which they represent will earn proﬁt. There is, however, an obligation upon us to insist that every issue of new securities to be sold in interstate commerce shall be accompanied by full publicity and information and that no essentially important element attending the issue shall be concealed from the buying public. (President Franklin D. Roosevelt, 29 March 1933, from a letter to Congress urging passage of the Securities Act of 1933) INTRODUCTION: OPERATIONALIZING TRANSPARENCY AND DEMOCRATIC GOVERNANCE In 1998, half of all US households owned stock in a publicly traded company.1 At the height of the US stock market bubble in 2000, the value of global equity capital markets was approximately US$35 trillion. On an average day in January 2005, 1.6 billion shares worth approximately US$54 billion were traded on the New York Stock Exchange, the largest of scores of such markets in the USA.2 Susan P. Shapiro (1984, p. 1) summarizes the signiﬁcance of US...
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