Buybacks were largely illegal until 1982, when the SEC adopted Rule 10B-18 (the safe-harbor provision) under the Reagan administration to combat corporate raiders. This change reintroduced buybacks in the US, leading to wider adoption around the world over the next 20 years.

Did stock buybacks used to be illegal?

It is worth noting that until 1982, stock buybacks were illegal—deemed as market manipulation. ... Dividends and buybacks, Hay says, have been running above excess cash flow since 2013.

Did Reagan make stock buybacks legal?

Did you know that stock buybacks were illegal until 1982? It's true. The SEC, operating under the Reagan Republicans, passed rule 10b-18, which made stock buybacks legal. Up until the passing of this rule, the Securities Exchange Act of 1934 considered large-scale share repurchases a form of stock manipulation.