Introduction: The Federal Securities Code -- Its Purpose, Plan, and Progress

The first generation of federal securities statutes, vintage 1933-40, has sprouted tentacles in so many areas of the American corpus juris that it is not easy to think of any field in which so much law-and lore-have been built on so flimsy a statutory base. The nineteen-page grandfather statute, the Securities Act of 1933, goes on, with a continually enhanced fertility that belies its years, to yield esoterica like the "140 series" of rules: professed "safe harbors" whose entrances are guarded by Cerberus atop Scylla and a bevy of Sirens cavorting in Charybdis. In the area of "fraud" that peripatetic (some would Say picaresque) jack-of-all-trades, rule 10b-5--a child of the American legal house that the Supreme Court seems not to have wanted to acknowledge until it had almost reached its majority--has produced many hundreds of cases, two full-blown treatises,' elation (at least until the Court's recent expressions) among academic circles and the "plaintiffs' bar," and a certain wringing of hands by corporate management and those lawyers whose duty it is to guard and defend them. Civil liability has become a jungle as the lush growth of the"implied" actions--not only under rule 10b-5 but also under the proxy rules, the tender offer provisions of 1968, the Federal Reserve credit rules and section 36 of the Investment Company Act--has dwarfed, upstaged, outshone, and made wide end runs around, the express civil liability provisions.