Final answer:
The Securities and Exchange Commission (SEC) is the organization that protects consumers from illegal stock purchases and dishonest investments. It regulates the securities market and ensures transparency and fairness, thereby restoring and maintaining public confidence in the financial markets.
Step-by-step explanation:
The federal organization that protects consumers from illegal stock purchases and dishonest investments by investment professionals is the Securities and Exchange Commission (SEC). Established as part of the response to the financial crisis of the 1930s, the SEC has a mandate to regulate and supervise the sale of securities, as well as the brokers, dealers, and bankers involved. President Roosevelt saw the need to restore confidence in the markets, which led to the establishment of the SEC to oversee Wall Street, putting an end to various forms of stock manipulation and insider trading, making the markets more transparent and reliable.
The Federal Trade Commission (FTC) also plays a role in consumer protection and has broad jurisdiction over competition and consumer protection in various economic sectors. However, it primarily focuses on internet scammers and deceptive trade practices.