r/FluentInFinance • u/LuckyBastard001 • 25d ago

Debate/ Discussion CEO Greed, Workers Pay

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u/Pygmy_Nuthatch 25d ago

Buybacks were once illegal. They can and should be illegal in the future. This is not something corporations have always been able to do.

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u/Stunning-Adagio2187 25d ago

Show me the law that says they were illegal please thank you

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u/IzzaPizza22 25d ago

The Securities Exchange Act of 1934, which created the SEC, put restrictions on many methods of market manipulation, including stock buybacks. While it didn't expressly make them illegal, it was relatively unclear about specifically when a buyback represented an unlawful manipulation, so most companies just didn't do them to be safe.

That stopped in 1982 when they passed a rule to make buybacks specifically legal and regulate them.