Rethinking Securities Law—Laying the Groundwork

This chapter explains the need for the “rethinking” of the federal securities laws, with particular emphasis on the Securities Act of 1933 and the Securities Exchange Act of 1934. Recognizing the historical preeminence of the U.S. securities law framework, the chapter first highlights key attributes that facilitate the effectuation of this achievement. Thereafter, the chapter addresses problematic characteristics of U.S. securities regulation. As set forth therein, the framework of securities regulation that exists today in the United States is comprised of piecemeal federal legislation, judicial decisions, SEC action, state securities (blue sky) activity, and self-regulatory organization oversight. As a consequence, the presence of consistent and logical regulation all too often is absent. With frequency, in both transactional and litigation settings, mandates apply that are erratic and antithetical to sound public policy. Setting the stage, in a preliminary manner, the chapter identifies several of the key problematic areas, succinctly explains their deficiencies, and suggests corrective measures that should be implemented.