Introduction:

Congress passed the Securities Act of 1933, 15 U.S.C. §§ 77a et seq. (Securities Act), and the Securities Exchange Act of 1934, 15 U.S.C. §§ 78a et seq. (Exchange Act, collectively, the Acts) following the 1929 stock market crash that triggered the Great Depression. Prior to the passage of the Securities Act, President Franklin Roosevelt stated, “This proposal adds to the ancient rule of caveat emptor the further doctrine, ‘let the seller also beware.’ It puts the burden of telling the whole truth on the seller.” The Acts were intended to be clear statutes with clear violations.

However, over the past 80 years, both Congress and the courts have significantly weakened the Acts. Paying all due respect to the retiring David Letterman, this article is the first in a two part series that counts down the Top 10 obstacles to successfully litigating securities fraud claims under the Acts.

Originally published in the American Bar Association on December 5, 2014.