The New Deal swept through Wall Street on this day in 1934, as President Franklin Roosevelt signed the Securities Exchange Act. With the swoop of his pen, Roosevelt sanctioned a set of regulations designed to rein in the stock swapping shenanigans and duplicitous sales tactics that had riddled the New York Stock Exchange (NYSE) and helped spark the Great Crash of 1929. Along with imposing registration requirements for all exchanges and curbing stock purchases by cash-strapped traders, the legislation created the Securities Exchange Commission (SEC). The SEC was charged with nothing less than reviving the public's tattered faith in the stock market, and was thus given the lead to monitor both brokerage houses and investment banks. Few pieces of New Deal legislation played well on Wall Street; the Securities Exchange Act -- along with the adjoining Exchange Act passed in 1933 -- was particularly loathed by traders and investment leaders. Whatever the fiscal and moral impact of the Great Crash, Wall Street had operated almost entirely unfettered since the late eighteenth century and was hardly ready to submit to government control. However, the relative restraint of the Securities Exchange Act, which, despite its regulatory bent, left traders a fair amount of latitude, and ensuing appointment of Joeseph P. Kennedy, a business-friendly industrialist, to head the SEC eased Wall Street's fears.
source: www.history.com
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