Question

Act of 33, 34, or common law?: a stockholder of a publicly held company who purchased the stock from another investor is filing suit for losses sustained on the stock

A) Act of 1933
B) Act of 1934
C) Common law
D) None of the above

Answer 1

The Act of 1934 is the correct answer as it regulates trading in the secondary market, which is where a stockholder suing for losses would seek remedy.

Step-by-step explanation:

The question pertains to the legal remedies available to a stockholder of a publicly held company who has sustained losses. The correct answer is B) Act of 1934. The Securities Exchange Act of 1934 regulates the trading of securities after their initial issuance, including the provision of legal means for investors to file suit if they suffer losses due to fraud or misrepresentation in the secondary market—the market where stocks are traded between investors, as opposed to being purchased directly from the issuing company. By contrast, the Securities Act of 1933 primarily governs the initial issuance and sale of securities. Common law remedies might also apply, but the specific legal frameworks for securities transactions are found in federal statutes.