Securities and Exchange Commission (SEC)

The US Securities and Exchange Commission, commonly known as the SEC, was established as an independent government entity on June 6th, 1934. The primary role of the SEC is to oversee and regulate financial markets, particularly focusing on the US securities markets such as stocks and bonds.

As a professional in the crypto industry, it is clear that a primary objective of the SEC is to inhibit and supervise market manipulation and fraud, as explicitly mentioned on their official online platform.

The objective of the SEC is to safeguard investors, uphold fair, systematic, and effective markets, and aid in capital generation. The SEC is committed to fostering a market climate that merits the public’s confidence.

The primary concept that led to the establishment of the SEC is the belief that all investors and traders should have the same opportunity to access pertinent information prior to purchasing or trading financial assets. Consequently, the SEC’s role is to guarantee that brokers, exchanges, and dealers interact with investors just and transparently.

Furthermore, the SEC has established regulations requiring public corporations to disclose all significant financial information to the public. Consequently, a diverse range of investors have the ability to review the same data before making investment choices.

The SEC releases informative materials and regular financial statements. Investors can access quarterly and yearly reports submitted by public and regulated firms via the SEC’s online database, EDGAR (Electronic Data Gathering, Analysis, and Retrieval system).

The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) actively prevent unlawful practices in financial markets, including Ponzi and pyramid schemes. The CFTC, however, primarily regulates derivatives markets, encompassing options and futures contracts. The SEC frequently deals with violations such as insider trading, dissemination of false information, and accounting fraud.

Following the 2008 Financial Crisis, the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law by US President Barack Obama, thereby expanding the regulatory powers of the SEC and the CFTC.

In 2019, the structure of the SEC was organized into five primary operational divisions.