Securities Litigation Defense Costs Shifted, Impacting Fraud Prevention Efforts
The article discusses how federal securities regulations aim to prevent fraud in securities sales by ensuring all relevant information is disclosed. This is done through laws like the Securities Act of 1933 and the Securities Exchange Act of 1934. The study explores how Congress and the courts have created legal actions to punish those who make false statements or omissions when selling securities. It also considers the varying levels of investor knowledge and the compliance costs for companies.