Securities and Antitrust

Overview

Description

The transactions that result from sellers and buyers coming together are the core of an economic system. Ideally, financial markets are self-regulating, but attempts by individuals to manipulate markets can interfere with their normal functioning. While individuals can try to restrain trade in the products of competitors to promote their own products, antitrust laws are necessary to confront some of the more severe actions. Individuals can also try to induce others to buy or sell securities by using false information, which means laws are necessary to combat fraud in the sale and purchase of securities.

At A Glance

  • Antitrust law deals with the protection of trade and commerce from unlawful restraints on trade, such as price-fixing, price discrimination, and harmful concentrations of power in monopolies.
  • Competition is considered an essential part of a capitalist market, and antitrust laws are aimed at ensuring that competition is allowed to flourish.
  • Securities fraud happens when someone provides false information to influence investments or the purchase or sale of securities.
  • The Securities and Exchange Commission inspects securities firms, brokers, investment advisors, and rating agencies. Regulating securities is important because truthful and adequate information helps buyers and sellers make wise decisions.