What does the Securities Act of 1933 allow regarding the sale of worthless stock?

The Securities Act of 1933 primarily focuses on the regulation of the offer and sale of securities in order to promote transparency and prevent fraud in the securities markets. While the act does impose requirements for registration and disclosure designed to protect investors, it does not specifically prohibit the sale of worthless stock.

The act allows companies to offer and sell securities, including those that may not have value or are considered “worthless.” However, this does not mean that the offering is devoid of regulatory frameworks; companies must still provide relevant information that helps investors make informed decisions.

The correct answer highlights the lack of explicit restrictions against selling worthless stock, provided that any necessary disclosures are made. However, it's essential to note that while the act permits such sales, it places the onus on sellers to ensure honesty and transparency in their offerings to avoid misleading investors.