“The system essentially consisted of a self-regulating cohort of knowledgeable insiders that was based on the old doctrine of caveat emptor. The government’s role was largely one of establishing fiduciary and property laws. What derailed the system in the 1920s turned out to be a fantastic stock market bubble, in the course of which risking share prices drew thousands of unsophisticated investors into the market, where, in search of quick and sure profits, they could be relied upon to make unwise and ill-informed investment decisions. Under such circumstances, there were plenty of opportunities for them to suffer serious losses, often promoted by people and firms who were well entrenched in the inner circle of the time.”

“Financial market regulation at the time was based on a simple concept of accountability for full disclosure of material information, together with “fair” trading practices, with the intent of protecting unsophisticated investors who were inadequately prepared to look after themselves.”