Who is the U.S. Securities and Exchange Commission?
The U.S. Securities and Exchange Commission (SEC) is an organization set up by the United States government in response to the Wall Street Crash in 1929. The SEC mission statement explains how the organization was created to “protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation.” The Securities Exchange Act of 1934 was created as a result of the Great Crash of 1929, designed to govern securities transactions on the secondary market (or aftermarket): this led to the creation of the SEC.
Founded on June 6th of 1934 in Washington, DC, United States, the headquarters remain located in The Capitol. Government official Gary Gensler was nominated to be the Executive Chairman of the SEC in February 2021, by President Joe Biden.
As a government agency, US taxpayers are responsible for funding the organization, and a federal appropriation process is required for the SEC to receive their annual operating budget.
SEC has the power to bring a civil action against people breaking the laws it is responsible for overseeing, as well as working on criminal cases in collaboration with the US Justice Department. The financial markets and entities SEC is responsible for include investment funds, investment advisors, dealers, brokerage firms, and securities exchanges.
In 2021 the SEC was responsible for obtaining judgments for almost $2.4 billion USD in disgorgement (repayment of illegal or unethical profits) and $1.4 billion in penalties.
What is the SEC responsible for?
The responsibilities of the Security and Exchange Commission are divided into the following five divisions:
Division of Corporation Finance
This division is responsible for the oversight of registered companies that offer securities to the public. It serves as a regulatory watchdog and will follow up on incorrect fillings. Firms will need to amend their practices when rules are not followed or they face sanctions. Overall, the Division of Corporation Finance improves the efficiency, trustworthiness, and transparency of US securities markets.
Division of Enforcement
It is best to think of the Division of Enforcement as the policing division of the SEC. They have the power to bring a civil action against entities that violate the law and recommend criminal charges for the Department of Justice to follow up on. Some of the top violations that this division handles regularly include securities offerings, broker-dealer misconduct, insider trading, investment advisory issues, market price manipulation, foreign bribery, accounting violations, and issuer disclosure.
Division of Investment Management
This division oversees investment advisers, securities research analysts, professional fund managers and investment funds. Their core mission statement is to protect retail investors from abuse and fraud within the investment industry. The division also helps industry professionals with complicated regulations to help them comply with the laws.
Division of Economic and Risk Analysis
This division helps the others by incorporating data analytics and economics. It helps analyze potential foul play and improves the inner working of the SEC by monitoring trends and new technologies. It also works with outside academics and technology companies to continually modernize the SEC.
Division of Trading and Markets
The Division of Trading and Markets maintains the members of securities markets, which include transfer agents, self-regulatory agencies, and broker-dealers. It creates and enforces fair standards for all to follow for the stability of the markets.
Why is the SEC important?
The U.S. Securities and Exchange Commission plays an important role in maintaining securities markets. The organization was created in response to the Wall Street Crash of 1929, which means it was created with the ethos of avoiding such events in the future.
SEC provides the necessary confidence in the stock market for it to be healthy and active. Investors can buy and sell stock without the fear of being scammed, manipulated, or losing their money without anyone to turn to for help.
You may have noticed that securities cases make news regularly. That is because SEC works hard on cases daily that indicate foul play. Financial crimes are serious and significant breaches can result in jail time. SEC works with the Department of Justice to help bring justice to parties that have lost money because of lawbreakers.
If the general public did not trust the stock market, then investors would not have the same opportunities to make money. If you have transferred money to a broker to invest in the stock market, then you can rely on the SEC to ensure that the broker will not take advantage of you.
What regions does the SEC cover?
The Security and Exchange Commission is responsible for maintaining the US stock market, which means that it is limited to the United States. The U.S. Securities and Exchange Commission has offices in the following regions:
When might you encounter the SEC?
You may want to contact the Security and Exchange Commission if you notice irregularities in how a broker or brokerage firm has handled a securities trade. You may want to report suspicious activity for trades on your behalf if you feel like there has been a scam after transferring money.
The SEC is enthusiastic about accepting and dealing with complaints. It is one of the main sources of how they discover bad actors in securities markets. The complaint process is detailed since you can enter the exact problems and rules that may have been broken. You will need to provide evidence when filing a complaint and an assessment will be made on the legitimacy of your claim. If there is a case, then it will be escalated and an investigation is launched.
You can also seek out the SEC for help understanding how they protect securities markets and the standards that participants have to adhere to. Their official website has an extensive FAQ section and other resources for educational purposes.
How to contact the U.S. Securities and Exchange Commission?
This section provides the available SEC contact options. You can use these details if you want to learn more about the U.S. Securities and Exchange Commission or if you wish to file a complaint.
Phone: you can use the investor information number, which is 1-800-732-0330. Also, you can contact each region by finding the relevant number on the official website.
Email: you can file a complaint by sending an email to firstname.lastname@example.org
To summarize, the U.S. Securities and Exchange Commission is a government organization that promotes trust in securities markets so investors are not worried about getting scammed. Understanding the rules of the organization gives you insight into how it can help you, especially if you believe you are a victim of fraud. We are keen to promote the most accurate information possible, to help our readers identify the safest ways to send money online. If you are interested in learning more about protecting your money in the USA or elsewhere, check out our other Regulators guides.