The Beginning And Tacit Control Of U.S. Investment Firms

by David Jenyns on September 22, 2008

A few investment firms were organized in the United States before World War I. The amount of new capital raised by investment firms in 1929 was about $1.5 billion. 3. Investment firms issued securities containing inequitable or discriminatory provisions or failed to protect the rights of security holders.

4. Control of investment firms was unduly concentrated through pyramiding or inequitable methods of control or control was inequitably distributed, or investment firms were managed by irresponsible persons.


5. Investment firms employed unsound or misleading accounting methods and were not subjected to adequate independent scrutiny.

7. Excessive borrowing and the issuance of excessive amounts of senior securities (leverage) increased unduly the speculative character of the junior securities of investment firms.

8. Investment firms operated without adequate assets or reserves.

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