Reference no: EM13192544

Subject: Legal Environment of Business
There are many regulations written to protect investors, consumers, and financial markets. The securities act of 1933 is designed to protect investors by prohibiting fraud in securities. This stabilizes investing by requiring disclosure of securities transactions. The Securities Exchange of 1934 also protects investors by provides for continuous periodic disclosures by publicly held corporations to enable the SEC to regulate subsequent trading. Many of the consumer protection regulations center around informing consumers about what's contained in products and warning consumers of the dangers that might be associated with using the products. Examples of these regulations include the Labeling Act of 1939, the Fur Products Labeling Act of 1951, the Flammable Fabrics Act of 1953, and the Comprehensive Smokeless Tobacco Health Education Act of 1986 which requires producers, packagers, and importers of smokeless tobacco to include one of several warnings about the use of smokeless tobacco on the labels of their products. Other regulations that protect consumers include the Truth in Lending Act which requires sellers and lenders to disclose credit terms and loan terms so that individuals can shop around for the best financial arrangement, and the Fair Credit Reporting Act which protects consumers against inaccurate credit reporting. Regulations that protect financial markets include the Sherman Act that makes it illegal to form monopolies and the Clayton Act that prohibits price discrimination.

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Source: Cross, F., & Miller, R., (2009). The Legal Environment of Business Eight Edition. South-Western, Cengage Learning, Mason OH.

Don't these regulations ultimately make products more expensive for consumers? Is this good for the economy and the markets?