E Wilson

Stock buybacks (open-market share repurchases) were largely avoided or practically restricted because they risked violating federal anti-manipulation statutes. •The Pre-1982 Landscape: Following the Great Depression and the passage of the Securities Exchange Act of 1934 (which prohibited artificial price manipulation), companies rarely performed open-market buybacks. The Securities and Exchange Commission (SEC) viewed large-scale corporate repurchases with high skepticism because they could be used to artificially inflate stock prices. Instead of an outright statutory ban, there was an atmosphere of severe regulatory risk and ambiguity. • •The 1982 Turning Point (SEC Rule 10b-18): In 1982, under the Reagan administration, the SEC adopted Rule 10b-18, which established a "safe harbor" for companies. As noted on Congress.gov, the rule set specific conditions regarding the manner, timing, price, and volume of repurchases. Meeting these guidelines assured companies the SEC would not treat the buyback as illegal market manipulation. • •Current Debate & Legislation: Critics—including lawmakers who have introduced measures like the Reward Work Act—argue that the 1982 rule opened the door to using corporate cash to inflate short-term stock prices and executive bonuses rather than investing in workers or R&D. Conversely, defenders maintain that buybacks are a flexible way to return excess capital to shareholders, much like dividends