Bubble Act Law and Legal Definition

Bubble Act is an English statute passed on 9, June 1720 to prevent corporate fraud. It forbade all joint-stock companies not authorized by royal charter. One of the reasons for the act was to prevent other companies from competing with the South Sea Company for investors' capital. The Act was repealed in 1825. Bubble act is also known as the Royal Exchange and London Assurance Corporation Act 1719, because those companies were incorporated under it.