May 31, 2024
Happy 90th Birthday to Exchange Act (and the SEC)
The Exchange Act celebrates its 90th birthday on June 6th. Among other things, that statute created the SEC (the FTC was the original regulator under the Securities Act). The SEC is commemorating that milestone with a webcast event featuring two panels, one comprised of former SEC chairs, and another featuring historian Michael Beschloss, legal scholar Joel Seligman, and former Maryland lieutenant governor Kathleen Kennedy Townsend. Lt. Gov. Townsend is also the granddaughter of the SEC’s first chair, Joseph Kennedy.
The SEC has a rich history that you can learn quite a bit about by visiting the SEC Historical Society’s website. For example, this excerpt from the website’s discussion of the early days of the SEC provides a reminder that strong policy disagreements among commissioners are nothing new:
The Securities Exchange Act required a bipartisan Commission. The two Republicans appointed by Roosevelt were highly experienced: George C. Mathews had directed the Wisconsin Public Utilities Commission before joining the FTC; and Robert E. Healy sat on the Vermont Supreme Court and ran an FTC investigation of public utility holding companies before joining the Commission.
Not surprisingly, some conflict arose during the sessions that the Commission held nearly every day during its first three months. Pecora continually pushed for a more adversarial approach, hoping that further revelations would lead to greater reform. Owing to his public utilities knowledge, Healy sympathized, but sided with Kennedy in the end. Landis and Mathews both agreed with the Chairman that the SEC could best establish its legitimacy and further constructive reform by easing regulations and accommodating business.
Although he respected the Chairman’s abilities, Pecora tired of being in the minority and resigned after six months. For the remainder of Kennedy’s tenure, the four Commissioners handled the heavy load alone.
The Library of Congress also has resources devoted to the Exchange Act and the SEC, including this blog on how the agency’s activities have made public company information more transparent and broadly available, and this group photo of the first commissioners.
Seated, left to right: Ferdinand Pecora, Joseph P. Kennedy, James M. Landis. Standing, left to right: George C. Matthews, Robert F. Healy.
– John Jenkins