Overview and Mission of the SEC
- The SEC is an independent agency of the United States federal government, created in response to the Wall Street Crash of 1929.
- Its primary purpose is to enforce the law against market manipulation.
- The SEC's mission is to protect investors, maintain fair and efficient markets, and facilitate capital formation.
- It enforces securities laws such as the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 2002.
Enforcement, Regulation, and History
- The SEC requires public companies and regulated entities to submit quarterly and annual reports, including the management discussion and analysis (MD&A).
- It maintains the EDGAR system, an online database for investors to access filed information.
- The SEC was established by the Securities Act of 1933 and Securities Exchange Act of 1934.
- Prior to the SEC, securities trading was regulated by state-level blue sky laws.
- Joseph P. Kennedy Sr. was the inaugural Chairman of the SEC, and the SEC prosecuted fraudulent practices and aimed to end insider trading.
Organizational Structure and Divisions
- The SEC is structured with Commissioners appointed by the President, with no more than three from the same political party.
- Commissioners serve five-year terms, and one is designated as chairman.
- The SEC has divisions such as Corporation Finance, Trading and Markets, Investment Management, Enforcement, and Economic and Risk Analysis.
- It also has regional offices in cities like Atlanta, Boston, Chicago, Denver, and Fort Worth.
Communications and Operations
- The SEC issues comment letters to public companies, requesting additional information or changes.
- Filers must reply to each item in the comment letter, and the SEC may provide follow-up comments.
- No-action letters are sent by the SEC staff in response to requests for clarity, indicating no enforcement action will be recommended.
- The SEC's performance in processing Freedom of Information Act requests has been criticized.
- The SEC's Enforcement Division has taken major actions against market manipulation and investigated trading irregularities.
Whistleblower Program and Relationship to Other Agencies
- The SEC runs a whistleblower rewards program, allowing whistleblowers to receive a percentage of penalties collected.
- The SEC has recovered billions in monetary remedies and paid out over a billion to whistleblowers.
- The SEC works with self-regulatory organizations, federal agencies, state securities regulators, and international securities agencies.
- It collaborates with agencies like FINRA, SIPC, MSRB, and the Presidents Working Group on Financial Markets.
- The SEC has been criticized for failing to implement recommendations and faced allegations of improper conduct, including the destruction of documents.
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market manipulation.
 Seal of the U.S. Securities and Exchange Commission | |
 U.S. Securities and Exchange Commission headquarters in Washington, D.C. | |
| Agency overview | |
|---|---|
| Formed | June 6, 1934 |
| Jurisdiction | United States federal government |
| Headquarters | Washington, D.C., U.S. |
| Employees | 4,807 (2022) |
| Agency executive |
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| Website | www |
In addition to the Securities Exchange Act of 1934, which created it, the SEC enforces the Securities Act of 1933, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Sarbanes–Oxley Act of 2002, and other statutes. The SEC was created by Section 4 of the Securities Exchange Act of 1934 (now codified as 15 U.S.C. § 78d and commonly referred to as the Exchange Act or the 1934 Act).
