Explain the regulatory Protection of Investors

Question

Explain the regulatory Protection of Investors?

Answer 1

The major purposes of securities legislation are to prevent and punish fraudulent practices in the securities industry and to require full disclosure of financial information to prospective buyers of shares and bonds offered for the first time to the public. These objectives are accomplished by registering or licensing those engaged in various aspects of the securities business, by requiring the issuer of securities to the public to file a prospectus with the securities commission, and by imposing continuing disclosure requirements.

Current investors are also protected by a complicated set of statutes dealing with corporate reorganization, mergers, and winding up.