1.1. Primary Market: Issuing Corporate Securities
When a company decides to raise money by issuing stocks or bonds, it is not allowed to simply sell these securities to anyone in any way it pleases. Because the government wants to protect potential investors, there are many rules about how stocks and bonds can be issued and sold. The most important piece of legislation you will need to know regarding how securities are issued is the Securities Act of 1933. The 1933 Act was born out of the fraudulent and unrestrained investment practices that led to the stock market crash of 1929.