Securities and Exchange Commission

Essay by gigi5600University, Bachelor's June 2009

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The U.S. Securities and Exchange Commission also known as "the SEC" is an Agency that was created by the Federal Government in 1934. The SEC was created a few years after the historical Great Depression of 1929 in hopes that the public could remain hopeful that the Government was doing everything it could to restore the balance in our country's stock market.

The SEC's mission statement "is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation" (U.S. Securities and Exchange Commission, 2008). In other words, it was created to maintain order between companies and the public so that people could not take advantage of any loopholes that led to the stock market crash. This allowed the Government to enforce a set of standards that would force companies to disclose public information about their finances for all companies that were considered public. The best known illegal acts are known as insider trading, accounting fraud and false or misleading investment information.

The SEC is responsible for overseeing seven laws that were created by the Federal Government and used to govern the securities industry today. Those seven laws were passed and have been updated for several decades and are called the "Securities Act of 1933, the Securities Exchange Act of 1934, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisors Act of 1940, the Sarbanes-Oxley Act of 2002 and also the Credit Rating Agency Reform Act" which was recently created in 2006 (U.S. Securities and Exchange Commission, 2008).

The SEC's main branch is located in Washington D.C. with 11 regional offices throughout major cities in the United States. The SEC is run by five Commissioners that are appointed by the President on a five year term. The Commissioners and employees of the...