Final answer:
The SEC allows tombstone ads prior to the effective date of securities, providing limited information under the Federal Securities Act. Political advertisement rules were impacted by the Bipartisan Campaign Reform Act that enforced candidate accountability, but Supreme Court rulings in 2010 eased restrictions on corporate-funded political messages.
Step-by-step explanation:
The types of advertisements related to a new issue that are allowed prior to the securities’ effective date by the Securities and Exchange Commission (SEC) are known as “tombstone” ads. Such ads provide basic information about the securities being offered but are limited in scope to avoid influencing the investment decision prior to full disclosure through a prospectus. Under the Federal Securities Act of 1933, strict rules were put in place to ensure that investors received adequate information about securities offered for public trade, with the SEC being established to enforce these regulations.
However, when it comes to political advertisements, legislation such as the Bipartisan Campaign Reform Act of 2002, also known as McCain-Feingold, aimed to make candidates accountable for their ads by requiring them to include approval messages within them. Despite these measures, the Supreme Court ruling in 2010 allowed corporations to use unlimited funding for political messages, thereby challenging previous campaign finance laws by citing First Amendment rights to free speech.