Which law established the Securities and Exchange Commission (SEC)?

The choice identifying the Securities Exchange Act of 1934 as the law that established the Securities and Exchange Commission (SEC) is accurate because this legislation was enacted in response to the stock market crash of 1929 and addressed a need for greater regulatory oversight of the securities industry. The SEC was created to enforce federal securities laws, regulate the securities industry, and ensure that the market operates fairly and transparently.

The 1934 Act aimed to restore investor confidence by regulating securities transactions on the secondary markets and providing for the disclosure of relevant financial information, thereby creating a more trustworthy environment for investors. The establishment of the SEC marked a significant turning point in U.S. financial regulation, allowing for greater oversight and regulation of companies that offered securities to the public.

While the other laws mentioned play important roles in the context of securities regulation, they do not specifically establish the SEC. The Securities Act of 1933 focused on the initial sale of securities and required companies to provide complete financial disclosures but did not create the SEC. The Investment Company Act of 1940 primarily regulates mutual funds and related investment companies, and the Sarbanes-Oxley Act of 2002 was designed to enhance corporate governance and accountability post-Enron scandal, but none of these created