SECURITIES LEGISLATION - SECURITIES ACT - STOP ORDER PROCEEDINGS - ADMINISTRATIVE TESTS OF MATERIALITY

With a view toward correcting many of the abuses which had accompanied the distribution of securities, the Congressional mandate embodied in the Securities Act of 1933, together with the regulations of the Securities and Exchange Commission adopted in pursuance thereof, require the publication of much information previously withheld from the investing public. The basic objective of the act is the full disclosure of every essentially important element attending issues of securities in interstate commerce or through the mails, and to that end the commission is empowered to issue a stop order suspending the effectiveness of a registration statement if it appears that the statement contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading.