Word: sec
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Dates: during 1950-1959
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...tiny Keystone Oil Co. As it turned out, Keystone was more talk than oil. Last week the Securities and Exchange Commission, the Government's watchdog over securities markets, filed charges against Chicago Promoter Harry G. Ames, 61, on 14 counts of mail fraud and failure to comply with SEC regulations. The Keystone case,, coming after the collapse of Bellanca stock (TIME, June 25) and indictment of Walter F. Tellier (TIME, May 7), pointed up a growing debate in the U.S. securities industry: Is SEC doing a good job of policing the nation's securities or is it falling...
Most experts agree that SEC, under Chairman J. Sinclair Armstrong, does a competent job in the main areas of responsibility outlined by Congress in the Securities Act of 1933. Such evils as rigged markets have disappeared, and Wall Street, which once fought bitterly against Government interference, now stands solidly behind SEC's work. Backed by strict laws, SEC makes sure that all new issues by listed corporations are accompanied by registration statements giving enough financial information to investors...
...some critics the problem is not so much what SEC does as what it does not do. Originally set up to control an industry marketing about $2.8 billion worth of new corporate securities annually, it must now regulate a booming giant growing at the rate of $10 billion annually. In 1955 some 4.000 stock and bond issues worth an estimated $340 billion were traded on U.S. exchanges, another 3,500 stock issues worth nearly $40 billion on the over-the-counter market. With the new boom in mutual funds and monthly investment plans, there are more shareholders trading more stock...
...SEC draws the heaviest fire in the policing of securities, often highly speculative, which are traded over the counter. The worst problem is in issues of $300,000 or less, which promoters are pouring out at an increasing rate...
SEChairman Armstrong himself estimates that one-third of all small issues are "questionable" at best. Yet under current SEC practice, offerings of less than $300,000 are exempt from the full disclosure requirements of standard company issues. Furthermore, unlike the larger companies whose officers are liable under civil law for misstatements of fact, issuers of exempt securities are not held accountable except under federal fraud statutes...