Which Investors to Protect? Evolving Conceptions of the American Shareholder, 1900-Present

A system of investor protection rests on a theory of which investors need protection. This chapter surveys the composition and perception of individual investors in American capital markets from 1900 to the present. The retail investor base has expanded remarkably during that time. Beyond the statistics, distinct “images” of the shareholder—that is, perceptions of the prototypical American investor—have dominated at different moments of U.S. securities law history. Although no one image will ever capture the full complexity of capital markets, I attempt to identify prevailing images in specific eras of securities regulation history, by examining comments by policymakers and industry participants. These images influence policy priorities and design