Aiming to increase our understanding of how the power of financiers is constrained by social controls, this paper examines the capacity of “market failures” and “group interest” theories to explain the origins of federal securities regulation. The problem is to explain (1) what motivated government officials to seek regulation, (2) what determined the content of regulatory proposals, and (3) why the proposals were successfully enacted. While both theories are found to be necessary, neither supplies a comprehensive explanation of all three aspects of the problem. Both are critically flawed for failing to recognize the role played by political contingency in determining whether regulatory proposals would be enacted. A central conclusion is that social controls over the securities market were established in response to an appearance of market failure, to the structural pressures of electoral politics,andto a series of politically contingent events beyond anyone's power to forsee or control.