Chapter One
Supervision of Registration of the Broker-Dealer and Personnel Management Activities
(9 questions on the exam)
Prior to the Great Depression, people who invested in securities often did so with little knowledge of the market. This wasn’t because investors didn’t want more information. It was because securities markets were largely unregulated and public information was scarce. The little information that was available to investors was often untrue. The situation was made worse by the common practice of buying on margin, often by investors who couldn’t afford to take large losses. Uninformed investing and speculation built a house of cards that came crashing down in 1929. In the 1930s, the Roosevelt administration and a reform-minded Congress responded with a wave of legislation to regulate the financial industries. This legislation would change the securities markets forever.
Among these changes was the creation of th