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The U.S. Securities and Exchange Commission ( SEC ) is a large independent agency of the United States federal government that was created following the stock market crash in the 1920s to protect investors and the national banking system. : 12,15 The SEC holds primary responsibility for enforcing the federal securities laws, proposing securities rules, and regulating the securities industry, which is the nation's stock and options exchanges, and other activities and organizations, including the electronic securities markets in the United States. : 2 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 ...

This section needs additional citations for verification . Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. ( February 2017 ) (Learn how and when to remove this template message) The SEC has a three-part mission: to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. To achieve its mandate, the SEC enforces the statutory requirement that public companies and other regulated companies submit quarterly and annual reports, as well as other periodic reports. In addition to annual financial reports, company executives must provide a narrative account, called the "management discussion and analysis" (MD&A), that outlines the previous year of operations and explains how the company fared in that time period. MD&A will usually also touch on the upcoming year, outlining future goals and approaches to new projects. In an attempt to level the playing fiel...

Prior to the enactment of the federal securities laws and the creation of the SEC, there existed so-called blue sky laws. They were enacted and enforced at the state level and regulated the offering and sale of securities to protect the public from fraud. Though the specific provisions of these laws varied among states, they all required the registration of all securities offerings and sales, as well as of every U.S. stockbroker and brokerage firm. However, these blue sky laws were generally found to be ineffective. For example, the Investment Bankers Association told its members as early as 1915 that they could "ignore" blue sky laws by making securities offerings across state lines through the mail. After holding hearings on abuses on interstate frauds (commonly known as the Pecora Commission), Congress passed the Securities Act of 1933 (15 U.S.C. § 77a), which regulates interstate sales of securities (original issues) at the federal level. The subsequent Securities Exchan...

Commission members edit The Commission has five Commissioners who are appointed by the President of the United States. The commission is kept Non-partisan as no more than three Commissioners may belong to the same political party. Their terms last five years and are staggered so that one commissioner's term ends on June 5 of each year. Service may continue up to eighteen additional months past term expiration. The President also designates one of the Commissioners as Chairman, the SEC's top executive. However, the President does not possess the power to fire the appointed Commissioners, a provision that was made to ensure the independence of the SEC. This issue arose during the 2008 presidential election in connection with the ensuing financial crises. Current SEC Commissioners Name Title Party Took office Term expires Jay Clayton Chairman Independent May 4, 2017 June 5, 2021 Caroline A. Crenshaw Commissioner Democrat – June 5, 2024 Allison Herren Lee Dem...

Comment letters edit Comment letters are issued by the SEC's Division of Corporation Finance in response to a company's public filing. This letter, initially private, contains an itemized list of requests from the SEC. Each comment in the letter asks the filer to provide additional information, modify their submitted filing, or change the way they disclose in future filings. The filer must reply to each item in the comment letter. The SEC may then reply back with follow-up comments. This correspondence is later made public. In October 2001 the SEC wrote to CA, Inc., covering 15 items, mostly about CA's accounting, including 5 about revenue recognition. The chief executive officer of CA, to whom the letter was addressed, pleaded guilty to fraud at CA in 2004. In June 2004, the SEC announced that it would publicly post all comment letters, to give investors access to the information in them. An analysis of regulatory filings in May 2006 over the prior 12 months indicat...

In the latest Center for Effective Government analysis of 15 federal agencies which receive the most Freedom of Information Act (FOIA) requests published in 2015 (using 2012 and 2013 data, the most recent years available), the SEC was among the 5 lowest performers, earned a D− by scoring 61 out of a possible 100 points, i.e. did not earn a satisfactory overall grade. It had deteriorated from a D− in 2013.

A Controlled Company is that in which over 50% of the voting power is held by an individual, a group or another company.

List of major SEC enforcement actions (2009–12) edit The SEC's Enforcement Division took a number of major actions in 2009–12. Regulatory action in the credit crunch edit The SEC announced on September 17, 2008, strict new rules to prohibit all forms of "naked short selling" as a measure to reduce volatility in turbulent markets. The SEC investigated cases involving individuals attempting to manipulate the market by passing false rumors about certain financial institutions. The Commission has also investigated trading irregularities and abusive short-selling practices. Hedge fund managers, broker-dealers, and institutional investors were also asked to disclose under oath certain information pertaining to their positions in credit default swaps. The Commission also negotiated the largest settlements in the history of the SEC (approximately $51 billion in all) on behalf of investors who purchased auction rate securities from six different financial institutions. Regulato...

In addition to working with various self-regulatory organizations such as the Financial Industry Regulatory Authority (FINRA), the Securities Investor Protection Corporation (SIPC), and Municipal Securities Rulemaking Board (MSRB), the SEC also works with other federal agencies, state securities regulators, international securities agencies and law enforcement agencies. In 1988 Executive Order 12631 established the President's Working Group on Financial Markets. The Working Group is chaired by the Secretary of the Treasury and includes the Chairman of the SEC, the Chairman of the Federal Reserve and the Chairman of the Commodity Futures Trading Commission. The goal of the Working Group is to enhance the integrity, efficiency, orderliness, and competitiveness of the financial markets while maintaining investor confidence. The Securities Act of 1933 was originally administered by the Federal Trade Commission. The Securities Exchange Act of 1934 transferred this responsibility from th...

1933: Securities Act of 1933 1934: Securities Exchange Act of 1934 1938: Temporary National Economic Committee (establishment) 1939: Trust Indenture Act of 1939 1940: Investment Advisers Act of 1940 1940: Investment Company Act of 1940 1968: Williams Act (Securities Disclosure Act) 1982: Garn–St. Germain Depository Institutions Act 1999: Gramm–Leach–Bliley Act 2000: Commodity Futures Modernization Act of 2000 2002: Sarbanes–Oxley Act 2003: Fair and Accurate Credit Transactions Act of 2003 2006: Credit Rating Agency Reform Act of 2006 2010: Dodd–Frank Wall Street Reform and Consumer Protection Act 2012: Volcker Rule (a specific section of the Dodd–Frank Act) Title 17 of the Code of Federal Regulations