If you want to learn more about the history what you want to look for is "Blue Sky Laws" there's a brief history here: http://digitalcommons.law.yale.edu/cgi/v

If you want to learn more about the history what you want to look for is "Blue Sky Laws" there's a brief history here: http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=2679&context=fss_papers http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?artic... The context was unsophisticated investors were being exploited without appreciating the risks involved. They thought they were investing when they were essentially gambling and the underlying security was essentially worthless.