In 1932, at the height of the Great Depression, the Senate Banking Committee began publicized study of the financial sector. The hearings, which became known as the Pecora hearings after the banking committee lead counsel Ferdinand Pecora, has shown to be the most respected financial institutions in the country deliberately misled investors about the desirability of certain securities dealing irresponsible investments, and offered benefits not granted to insiders ordinary investors. During the famous "Hundred Days" session of Congress that began his presidency, Roosevelt signed two bills designed to prevent some of these violations, but he also believes that the government should play a more active role in the financial system by regulating the national stock exchanges. In February 1934, the president urged Congress to pass such legislation, prompting the introduction of the bill, entitled Securities and Exchange Commission, which will make all the stock exchanges to register with the Federal Trade Commission, will limit the amount of credit that can be transferred to the securities to investors, and would ban a number of practices (such as short-selling), which were considered to facilitate stock manipulation. In addition, the law requires that all companies with stock market securities to publish detailed reports on business as often as desired FTC. Wall Street, are, in particular, the New York Stock Exchange (NYSE) President Richard Whitney, took a strong position on the Securities and Exchange Act. Whitney was eventually called to give evidence at the hearing in Congress on the stock exchanges at the end of February 1934. Will he be able to persuade lawmakers to take another course, or his arguments failed to win over those who believe that strict rules were exactly what the financial markets requires following the Great Crash? "Hide
by David Moss, Cole Bolton, Eugene Kintgen Source: Harvard Business School 24 pages. Publication Date: December 10, 2010. Prod. #: 711046-PDF-ENG
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