“By investigating Wall Street business practices and calling bankers in to testify, Ferdinand Pecora exposed Americans to a world they had no clue existed. And once he did, public outrage led to the reforms that the lords of finance had, until his hearings, been able to stave off.”
Senator Glass’s description of the hearings proved prophetic; the atmosphere had become truly circus-like. And although Morgan’s appearance marked the height of the drama, the hearings continued for nearly another year, as public outrage over the conduct and practices of the nation’s bankers smoldered. Roosevelt took advantage of the public sentiment, arousing broad support for regulation and oversight of the financial markets, as the Pecora Commission had recommended. After passing the Securities Act of 1933, Congress established the Securities and Exchange Commission to regulate the stock market and to protect the public from fraud. The Pecora commission’s report also endorsed the separation of investment and commercial banking and the adoption of bank deposit insurance, as required by Glass-Steagall, which Roosevelt signed into law in 1933.
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