Which regulatory agency was created in 1934 to supervise stock exchanges and punish fraud in securities trading?

Which regulatory agency was created in 1934 to supervise stock exchanges and punish fraud in securities trading?

• A. Securities and Exchange Commission (SEC)
• B. FDIC
• C. Social Security Act
• D. Interstate Commerce Act

Answer: (A)

Regulation of securities markets after the Great Depression centralized into a federal agency created in 1934. The Securities and Exchange Commission was formed to supervise stock exchanges, register brokers and dealers, and enforce laws that prohibit fraud in trading. This setup was designed to restore investor confidence by increasing transparency and accountability in the securities markets, with the authority to investigate misconduct and impose penalties. The other options don’t fit this role: the FDIC focuses on bank deposits, the Social Security Act establishes social insurance programs, and the Interstate Commerce Act originally regulated railroads (and later trucking), not securities trading.

Regulation of securities markets after the Great Depression centralized into a federal agency created in 1934. The Securities and Exchange Commission was formed to supervise stock exchanges, register brokers and dealers, and enforce laws that prohibit fraud in trading. This setup was designed to restore investor confidence by increasing transparency and accountability in the securities markets, with the authority to investigate misconduct and impose penalties. The other options don’t fit this role: the FDIC focuses on bank deposits, the Social Security Act establishes social insurance programs, and the Interstate Commerce Act originally regulated railroads (and later trucking), not securities trading.